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Informist, Thursday, Jul. 2, 2026

 

--HC rejects tribunal order asking India Intl to pay INR 2.27 bln to L&T 

 

By Surya Tripathi

 

NEW DELHI – The Delhi High Court has set aside an arbitral tribunal's interim order asking India International Convention and Exhibition Centre Ltd. to release an amount of INR 2.27 billion in favour of Larsen & Toubro Ltd. within six weeks. The order relates to a contract between the parties that involves stage-wise payments. The court said the tribunal's interim order was not sustainable in law and hence was being set aside.

 

It cannot be laid down as an absolute proposition that an arbitral tribunal is wholly denuded of the power to grant monetary relief while exercising jurisdiction under Section 17(1)(ii)(e) of the Arbitration and Conciliation Act, 1996, the court said. However, where such relief is granted, the tribunal must satisfy a considerably higher threshold than that ordinarily applicable to measures intended merely to preserve or protect the subject matter of arbitration. In the current case, the tribunal had failed to satisfy that heightened threshold, more particularly in relation to the requirements of balance of convenience and irreparable injury, the court said.

 

The dispute in the case arose from a complex contractual matrix involving substantial claims, counterclaims, alleged negative variations, revisions of certified values, and competing interpretations of the contractual framework, Justice Harish Vaidyanathan Shankar said. Even the arbitral tribunal had acknowledged that the dispute relating to payment stages could not be determined without a detailed examination of evidence, he said. In such circumstances, the grant of substantial monetary relief in respect of other stage payments at the interim stage was not warranted, he added.

 

India International is a special purpose vehicle constituted under the aegis of the government of India to develop and manage the India International Convention and Expo Centre Project at Dwarka, Delhi. Delhi Mumbai Industrial Corridor Development Corp. Ltd., a company established by the Centre, had issued a request for qualification-cum-proposal in 2017 to select engineering, procurement, and construction contractors for detailed design, construction, testing, and commissioning of the project.

 

In 2018, L&T emerged as the successful bidder and a contract was executed by it with India International. Under the contract, L&T was entrusted with the detailed design, construction, testing, and commissioning of phase-I works of the project on a lump-sum basis. The contractual arrangement contemplated stage-wise payments to be released by India International upon certification by an independent engineer appointed under the contract through interim payment certificates and stage-wise payments upon verification and certification of the work executed by L&T. 

 

During the execution of the project, disputes arose between the parties regarding various aspects of contractual performance, including change in scope of work, delay in completion of the project and extension of time, withholding of payments, goods and services tax-related claims, and costs allegedly incurred on account of force majeure events. Consequently, arbitration was invoked, wherein L&T raised claims aggregating to about INR 30 billion against India International. The petitioner contested the claims and, in turn, raised counterclaims aggregating to about INR 10.56 billion on account of negative change in scope and liquidated damages.

 

During the pendency of the arbitral proceedings, further disputes arose regarding release of payments under the stagewise schedule. After the tribunal's interim relief to L&T, India International moved the high court, saying the tribunal had, at an interim stage, granted substantive monetary relief to L&T even when the underlying disputes remained undecided.

 

Thursday, shares of Larsen & Toubro ended at INR 4,059.40 on the National Stock Exchange, down 0.8% from Wednesday.  End

 

Edited by Rajeev Pai

 

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