News
Clarification on Applicability of Modified Dispute Resolution Provisions
The National Highways Authority of India (NHAI), vide Policy Circular bearing reference no. 11.83/2026 dated February 12, 2026, has issued a clarification regarding the applicability of the modified dispute resolution provisions introduced pursuant to directions of the Ministry of Road Transport & Highways (MoRTH).
The clarification directly relates to the amendments adopted by NHAI vide Policy Circular bearing reference no. 11.82/2026 dated January 19, 2026, which incorporated MoRTH’s revised dispute resolution mechanism into the Model Concession Agreements and standard contract documents governing Build-Operate-Transfer [BoT (Toll)], Hybrid Annuity Model (HAM), and Engineering Procurement & Construction (EPC) projects.
MoRTH, vide its Circular dated January 12, 2026, introduced substantive modifications to the dispute resolution framework embedded within standard project agreements. The amended framework recalibrated dispute management by introducing a structured value-based bifurcation of disputes, providing that:
- Disputes up to Rs. 10 Crores shall be referred to designated institutional arbitration forums, including SAROD or the India International Arbitration Centre (IIAC);
- Disputes exceeding Rs. 10 Crores shall, upon failure of resolution under the contractual dispute resolution mechanism, be referred to conciliation under the Arbitration and Conciliation Act, 1996, with a prospective transition to mediation under the Mediation Act, 2023, upon notification.
These modifications were formally adopted by NHAI [vide Policy Circular bearing reference no. 11.82/2026 dated January 19, 2026].
Following the adoption of the amended dispute resolution provisions, NHAI has now clarified that the amended dispute resolution provisions introduced shall be applicable to the contracts signed or bids awarded prior to the issuance of the said letter/circular only upon obtaining consent of the concessionaire or contractor [clarification by MoRTH vide Letter No. H-25011/01/2025-P&P (C. No. 261489) dated January 28, 2026].
The clarification carries significant legal and contractual implications, principally affirming that amendments to dispute resolution provisions, which are integral to enforcement rights and procedural remedies, cannot operate retrospectively or be imposed unilaterally upon pre-existing contracts.
