The Supreme Court on Thursday stepped in to balance competing interests in a long-running arbitration dispute between the Hyderabad Metropolitan Development Authority (HMDA) and Cyberabad Expressway Limited (CEL). While refusing to interfere with the ongoing appeal, the top court directed HMDA to furnish a bank guarantee equal to 50% of the arbitral award amount, failing which execution proceedings may continue.
Background of the Case
The dispute traces back to a concession agreement signed in August 2007 for the design, construction, operation, and maintenance of an eight-lane access-controlled expressway in Hyderabad. The agreement was executed between HMDA, Hyderabad Growth Corridor Limited, and Cyberabad Expressway Limited.
Differences arose over performance obligations, annuity payments, and bonus entitlements. In 2017, CEL invoked arbitration under the contract. A three-member arbitral tribunal, headed by a former Supreme Court judge, passed an award in February 2019 directing HMDA to pay:
- ₹140.89 crore towards claims,
- ₹39.50 crore as bonus annuity,
- 12% annual interest, and
- ₹20 lakh as costs.
Following this, CEL initiated execution proceedings before the Commercial Court in Hyderabad.
Challenge Before Courts
HMDA challenged the arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996, but failed to secure relief. A further appeal under Section 37 was filed before the Telangana High Court.
In October 2023, the High Court granted conditional stay of execution, directing HMDA to deposit 50% of the awarded amount. The authority, however, did not comply with the condition.
Instead, HMDA later alleged that the award had been obtained by fraud and sought recall of the stay order. That application was dismissed. The High Court allowed the issue to be raised during final hearing of the appeal but declined to halt execution.
Read Also:- Chhattisgarh HC Upholds Gift Deed Cancellation, Says Senior Care Can Be an Implied Condition
Execution Dispute and Supreme Court Hearing
When execution proceedings continued, HMDA again raised allegations of fraud, this time before the executing court. The plea was rejected, prompting a civil revision petition before the High Court -which was also dismissed.
This led HMDA to approach the Supreme Court.
Senior Advocate Gopal Sankaranarayanan appeared for HMDA, while Senior Advocate Jaideep Gupta represented Cyberabad Expressway Limited.
Court’s Observations
The Supreme Court noted that the appeal under Section 37 is still pending before the High Court and that HMDA has already placed its allegations of fraud on record there.
The bench, comprising Chief Justice Surya Kant and Justice Joymalya Bagchi, made it clear that it would not examine the merits of those allegations at this stage.
“The issue is already pending consideration before the High Court. We refrain from expressing any opinion on merits,” the bench observed.
At the same time, the court acknowledged the need to protect the interests of the award-holder during the pendency of the appeal.
Read Also:- Chhattisgarh High Court Upholds PG Counselling Cancellation, Says No Vested Right After Rule
Final Decision of the Court
The Supreme Court directed HMDA to furnish a bank guarantee equal to 50% of the awarded amount within two weeks.
It further ordered:
- Execution proceedings to remain in abeyance only after the bank guarantee is furnished.
- If HMDA fails to furnish the guarantee, the executing court may proceed in accordance with law.
- The High Court has been requested to decide the pending appeal expeditiously, preferably within three months.
- The cost of ₹5 lakh imposed earlier by the High Court was set aside.
With these directions, the appeal was disposed of.
Case Title: Hyderabad Metropolitan Development Authority vs Cyberabad Expressway Limited
Case No.: Civil Appeal arising out of SLP (C) Diary No. 29495 of 2025
Decision Date: 23 January 2026
