February 5, 2025 | Mumbai – Dilip Buildcon Limited (NSE: DBL, BSE: 540047) has successfully secured an arbitration award against the National Highways Authority of India (NHAI), with a total compensation of ₹46.09 crore (inclusive of interest) related to contractual disputes in a highway construction project in Karnataka.
Key Arbitration Details
The arbitration was initiated by Dilip Buildcon Limited (DBL) regarding delays and breaches during the Rehabilitation and Upgradation of Kerala Border to Kollegala Section of NH 212 (Km 136.600 to Km 268.475) in Karnataka. The project was executed under the EPC agreement dated June 6, 2014.The key aspects of the arbitration award include:
- Compensation for delays in providing Right of Way (ROW).
- Payment of bonus for early project completion.
- Reimbursement for deleted works (withdrawn scope).
- Settlement of withheld interim payments and accrued interest.
- Refund of retention money.
- Arbitration costs.
Financial Impact & Implications
- The ₹46.09 crore award includes interest accrued up to the date of the decision.
- NHAI is required to pay the awarded amount immediately.
- In case of non-payment, an additional interest of 2% above SBI’s base rate (compounded quarterly) will be levied until the full amount is settled.
Potential Legal Challenge
- NHAI retains the right to challenge the arbitration award under the Arbitration and Conciliation Act, 1996.
- If challenged, Dilip Buildcon has affirmed its intent to defend the award through legal proceedings.
Corporate Response
Abhishek Shrivastava, Company Secretary of Dilip Buildcon, confirmed the arbitration ruling and its financial implications in a regulatory filing. He assured stakeholders that DBL will take necessary steps to ensure compliance and timely realization of the awarded amount.Outlook & Market Impact
This arbitration win reinforces DBL’s strong project execution capabilities and its ability to legally uphold contractual rights. While the ruling provides a financial boost, investors will closely watch NHAI’s response and any potential legal escalation.This development could positively impact DBL’s stock performance, given the expected cash inflow and the company’s ability to recover disputed claims efficiently. However, any prolonged litigation from NHAI could delay the final realization of the awarded amount.