NLA Insights
13 July 2026
The Delhi High Court, in Atlanta Infra Assets Limited v. National Highway Authority of India, decided cross-petitions filed under Section 34 of the Arbitration and Conciliation Act, 1996 challenging a majority arbitral award dated 16 November 2021 arising out of a highway concession project between Atlanta Infra Assets Limited and the National Highway Authority of India (“NHAI”). The judgment reaffirms the limited scope of judicial interference under Section 34, particularly in infrastructure disputes involving the interpretation of contractual timelines, the grant of interest and the assessment of damages.
The Court refused to substitute its own view where the tribunal’s findings were plausible, reasoned and supported by the contractual framework and the material on record, declining to interfere with the tribunal’s determination of a reasonable period for handing over land, its exercise of discretion in awarding interest and its assessment of nominal damages.
NHAI invited bids in 2004 for improvement, operation and maintenance of the Nagpur-Kondhali section of NH-6 in Maharashtra on a Build, Operate and Transfer basis. A consortium led by Atlanta Ltd. was awarded the project. A special purpose vehicle, later known as Atlanta Infra Assets Limited, was incorporated for execution of the project, and a concession agreement was executed between the parties on 09 December 2005 for a period of twenty years.
Disputes first arose in relation to events preceding the issuance of the Provisional Commercial Certificate dated 22 September 2011. Those disputes were separately arbitrated and culminated in an award dated 29 September 2016.
Since certain works could not be completed, the parties entered into a supplementary agreement dated 22 September 2011. Under this agreement, Atlanta was required to complete the remaining works within 120 days from the date on which land became available. Further disputes subsequently arose in relation to the events after the issuance of the Provisional Commercial Certificate, including delays in handing over additional right of way, interest, costs and NHAI’s counterclaims relating to operation and maintenance obligations.
The arbitral tribunal passed a majority award on 16 November 2021, accompanied by a dissenting opinion. NHAI’s application under Section 33 was dismissed by a correction order dated 07 January 2022. Both parties thereafter challenged different parts of the majority award under Section 34. During the proceedings, a limited settlement was recorded by order dated 02 December 2022, leaving only Atlanta’s challenge to Claim Nos. 1 and 6, and NHAI’s challenge to Counter Claim No. 4(c).
The principal issues before the Court were whether the arbitral tribunal had erred in fixing 18 months as the reasonable period for handing over additional right of way under the supplementary agreement; whether the tribunal had erred in awarding pendente lite interest at 10% instead of 12%; and whether NHAI was entitled to enhancement of damages under Counter Claim No. 4(c) for failure to carry out bituminous overlay work and application of tack coat.
The broader question was whether any of these findings suffered from patent illegality, perversity or violation of the terms of the contract so as to warrant interference under Section 34.
Atlanta argued that the arbitral tribunal had rewritten the contract by treating 18 months as the reasonable period for handing over additional right of way. According to Atlanta, the concession agreement, read with Schedule H and Clause 13.5.2, contemplated a period of 12 months for handing over additional land. Therefore, the tribunal could not substitute this with 18 months without evidence or reasoning.
Atlanta also challenged the award of interest. It contended that the parties had agreed during arbitral proceedings that interest would be payable at 12% per annum. However, while NHAI was granted interest at 12% on certain counterclaims, Atlanta was awarded pendente lite interest only at 10%. According to Atlanta, this amounted to arbitrary and unequal treatment.
On NHAI’s challenge to Counter Claim No. 4(c), Atlanta supported the award and argued that the Tribunal had rightly declined to mechanically adopt NHAI’s computation. Atlanta submitted that NHAI had neither pleaded nor proved any actual loss and that the policy guidelines relied upon by NHAI could not govern a concession agreement executed in 2005.
NHAI submitted that Atlanta’s challenge was beyond the permissible scope of Section 34. It argued that the supplementary agreement did not prescribe any fixed timeline for handing over the additional right of way. Therefore, the tribunal was entitled to determine a reasonable period after considering the surrounding circumstances.
On interest, NHAI argued that the arbitral tribunal had discretion under the Arbitration Act to determine the rate of pendente lite interest. The agreement recorded during the arbitral proceedings was limited to specific settled counterclaims and could not be treated as a universal agreement fixing 12% interest for all claims and counterclaims.
With respect to Counter Claim No. 4(c), NHAI contended that the tribunal had committed a computational error. According to NHAI, damages under Clause 18.13(b) of the concession agreement had to be calculated for each day of default. Since the Independent Consultant had recorded a delay of 517 days, NHAI argued that the award should be modified from Rs. 88,564 to Rs. 4,57,87,588.
The Delhi High Court dismissed both petitions and upheld the majority arbitral award read with the correction order. On Claim No. 1, the Court held that the tribunal had not rewritten the contract. The supplementary agreement did not prescribe a fixed timeline for handing over land. It merely required Atlanta to complete the work within 120 days “as and when the land becomes available.” In the absence of any stipulated timeline for making the land available, the tribunal was entitled to determine what constituted a reasonable period.
The Court found that the tribunal had considered the contractual framework, the earlier 12-month period under the concession agreement, the practical steps involved in land acquisition and the correspondence between the parties. On that basis, the tribunal fixed 18 months as the reasonable period. This was a plausible and reasoned view, and could not be interfered with under Section 34.
The Court rejected Atlanta’s argument that interest at 12% had been agreed for all claims and counterclaims. The Court found that the order dated 24 February 2020 recorded a limited settlement in respect of certain counterclaims only and did not constitute a blanket agreement fixing interest at 12% for every claim.
The Court further held that the arbitral tribunal had exercised its discretion in awarding pendente lite interest at 10%. The tribunal had considered that Atlanta’s claims had been frequently amended and crystallised only by the award. It had also considered prevailing bank lending rates. Therefore, the grant of 10% interest was a reasoned and plausible exercise of arbitral discretion.
On Counter Claim No. 4(c), the Court rejected NHAI’s attempt to enhance the award. The Tribunal had found that the policy guidelines relied upon by NHAI post-dated the concession agreement dated 09 December 2005 and, in terms, applied to agreements executed in 2006 and 2007. Further, accepting the formula prescribed by those guidelines, which had not been agreed between the parties, would amount to rewriting the contract.
The Court also upheld the tribunal’s decision to award only nominal damages. The tribunal had rejected NHAI’s computation because it was based on inapplicable policy guidelines and rates outside the contractual framework, while NHAI had failed to substantiate its claim for the higher amount. The Court held that this was a plausible view consistent with the principles governing reasonable compensation under Section 74 of the Indian Contract Act, 1872.
The judgment reinforces that proceedings under Section 34 are not appellate in nature. It is particularly relevant to concession agreement disputes, in which arbitral tribunals are frequently required to determine reasonable contractual timelines and assess technical evidence relating to project execution. A Court cannot reappreciate evidence, reinterpret contracts or substitute their own view merely because another view is possible.
The judgment also recognizes that where a contract does not prescribe a specific timeline, an arbitral tribunal may determine a reasonable period by considering the surrounding circumstances. A reasoned and plausible determination will ordinarily not warrant interference under Section 34.
The judgment further affirms that the award of interest lies within the tribunal’s discretion, unless it violates the contract or is arbitrary. It also recognizes that stipulated damages cannot be awarded mechanically; the tribunal must determine whether the amount claimed represents reasonable compensation and, where loss is capable of proof, whether such loss has been established.
The Delhi High Court’s decision in Atlanta Infra Assets Limited v. NHAI reaffirms the principle of minimal judicial interference in arbitral awards. The Court declined to interfere with the tribunal’s determination of a reasonable period for handing over land, its exercise of discretion in awarding interest and its assessment of nominal damages.
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