High Court Considers Appeal Against Dismissal of Section 34 Objection in Arbitration Dispute Over BOT Tunnel Project. Dispute involved claims for increased project cost, loss of toll, and advertisement revenue under Tripartite Concession Agreement, with Arbitral Tribunal awarding Rs. 198.04 crores plus IRR.

Case Note & Summary

The appeal before the High Court of Judicature for Rajasthan, Bench at Jaipur, arose from the dismissal of an objection petition under Section 34 of the Arbitration and Conciliation Act, 1996 by the learned District Judge, Commercial Court, Jaipur, vide order dated 27.01.2025. The appellants, Jaipur Development Authority and Urban Development and Housing Department, Government of Rajasthan, challenged the arbitral award dated 25.06.2023 and corrigendum award dated 31.07.2023. The underlying dispute stemmed from a Tripartite Concession Agreement dated 27.11.2009 executed between the Government of Rajasthan, Jaipur Development Authority, and the respondent concessionaire, Rohan Rajdeep Rajasthan Infra Project Limited, for the construction, operation and maintenance of an alternate route to Ghat Ki Guni through a tunnel in the Jhalana Hills, connecting to NH-11 (Agra Road), Jaipur, on a Build Operate Transfer basis. The project cost as per bid documents was Rs. 150 crores, with a concession period of 13 years 05 months 20 days. The actual commencement date was 15.12.2010, against a proposed commencement date of 01.12.2009, and the actual completion date was 31.01.2013, earlier than the stipulated date of 14.06.2013. The respondent filed a statement of claim on 15.02.2019, seeking Claim No. 1 for increase in project cost of Rs. 175.67 crores, Claim No. 2 for loss of toll of Rs. 188.02 crores, Claim No. 3 for compensation of toll loss due to delay in achieving Commercial Operations Date of Rs. 40.71 crores, and Claim No. 4 for revenue loss on account of denial of right of way for displaying advertisements of Rs. 8.49 crores, along with declaratory reliefs, Internal Rate of Return at 20.33%, and arbitral costs. The Arbitral Tribunal allowed Claim No. 1 in toto, partly allowed Claim No. 2 by awarding Rs. 12.20 crores for leakage of traffic through old GKG road and Rs. 1.68 crores for demonetization while disallowing other sub-claims, disallowed Claim No. 3, and allowed Claim No. 4. The total award was Rs. 198.04 crores, plus IRR at 20.33% per annum up to the date of the award, and post-award interest at 12% per annum if not paid within 90 days. Subsequently, the arbitrator passed a corrigendum award dated 31.07.2023 under Section 33 of the Act, deleting the total cap and making the award without any upper limit by adding IRR on a compounding basis. Execution proceedings were instituted seeking recovery of Rs. 544.43 crores, calculated as Rs. 198.04 crore plus IRR at 20.33% with effect from 31.01.2019, plus additional 12% with effect from 01.08.2023. The executing court directed issuance of a warrant of recovery under Order XXI Rule 30 of the Code of Civil Procedure, 1908, on 09.01.2026, but the High Court stayed the execution proceedings on 22.01.2026. The present appeal challenged the order dismissing the Section 34 objections and the approach of the Commercial Court in refusing interference. The available extracted text contains the introduction, factual background, and details of the claims and award, but does not include the parties' detailed arguments, the court's analysis, or the final decision, as the judgment text is truncated after paragraph 11. Therefore, the final holding cannot be determined from the provided material.

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