Limited Judicial Interference in Arbitration Appeals: Delhi High Court Upholds Arbitral Award on Additional Mobilization and Prolongation Costs Against NHAI

1. Case Snapshot

Case Name: National Highways Authority Of India vs M/S Unitech-Ncc Jv

Citation: FAO(OS) (COMM) 131/2025

High Court: High Court of Delhi

Bench: Hon'ble Mr. Justice Anil Kshetarpal and Hon'ble Mr. Justice Amit Mahajan

Date of Judgment: 1st July, 2026

Area of Law: Arbitration Law, Contract Law, Infrastructure Projects, Damages

2. Judgment in Brief

The Delhi High Court dismissed an appeal filed by the National Highways Authority of India (NHAI) under Section 37 of the Arbitration and Conciliation Act, 1996, challenging a Single Judge's order upholding an arbitral award. The dispute arose from a highway widening contract where the contractor claimed additional costs due to NHAI's failure to hand over the project site in the staged manner contemplated under the contract. The Arbitral Tribunal had awarded compensation under three heads: additional mobilization of plant and machinery (Claim No. 3), prolongation costs for maintaining resources during the extended contract period (Claim No. 4), and bonus/compensation for loss of opportunity to earn bonus (Claim No. 7). The Court held that the scope of interference under Section 37 is even narrower than under Section 34, and appellate courts cannot reappreciate evidence or substitute their view for that of the Tribunal. The findings of the Tribunal were based on contemporaneous records and represented a plausible view, warranting no interference.

3. Relevant Facts

The Contract and Project

• NHAI and Unitech-NCC JV executed a Contract Agreement dated 25.05.2001 for widening and upgradation of National Highway-5 in Andhra Pradesh.

• The stipulated commencement date was 08.06.2001 and scheduled completion was 07.02.2004.

• The project was ultimately completed on 20.03.2005.

The Dispute

• The contractor claimed that NHAI failed to hand over the project site in the staged manner envisaged under the contract.

• NHAI allegedly handed over land in 36 fragmented stretches, compelling the contractor to execute work across scattered locations simultaneously.

• The contractor invoked arbitration and raised various claims.

The Arbitral Award

• A three-member Tribunal rendered its Award on 16.05.2011.

• Relevant claims:
  Claim No. 3 (Additional Mobilization): Claimed Rs.17.23 cr, awarded Rs.3.59 cr.
  Claim No. 4 (Prolongation Costs): Claim

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