Arbitration body to deal with NHAI- contractors disputes

The road transport & highways ministry may set up an arbitration body for roads that would be an institutional setup to deal with disputes between contractors and the National Highways Association of India (NHAI), according to a senior NHAI official.

“The minister has suggested that he may move to set up an arbitration body for the roads and that will be an institutional set up to deal with all such cases,” said the official.

At present, any dispute between the contractors and the NHAI goes first to the Dispute Resolution Board (DRB). If not satisfied with the decision given by the board, one can go for arbitration.

In arbitration, both the parties — contractor and the government — will appoint arbitrators and both the parties together will appoint a principal arbitrator. But all the arbitrators should be chosen from a list of arbitrators approved by the Indian Roads Congress, which is a government organisation.

Further, the matter can be taken for hearing at the courts, which usually takes a lot of time.

All this process takes lot of time and there are cases continuing for the last 10 years, hence, blocking the contractors money and in a way delaying the project completion.

Contractors want the body to be independent in a way that any judgement by it is final and cannot be contested at any other court

“A separate body will not be much of use, as this will only increase the number of hurdles. This body can only be effective if it is made the first and the last body to deal with such disputes”, said M Murali, director general of National Highways Builders Federation.

“This body, which has been proposed, can only be effective, if any judgement by it cannot be challenged anywhere else,” added Murali.

“I think it is a good and a workable move. In the lines of the Environment Appellate Tribunal in the environment and forest ministry, an arbitration tribunal should come up under the road transport and highways ministry. The judgement by the tribunal should be final and that would help solve the problem of delays,” said another industry source.

Union Road Transport & Highways Minister Kamal Nath, along with Planning Commission Deputy Chairman Montek Singh Ahluwalia and NHAI officials, met the contractors and concessionaires to discuss the problems being faced by them on Wednesday. Nath suggested the idea of a separate institution at the same meeting.