MoRTH Issues Guidelines to Streamline Arbitration Timeline Extensions in Highway Projects

In a move aimed at improving the efficiency and certainty of dispute resolution in highway and infrastructure projects, the Ministry of Road Transport and Highways (MoRTH) has issued a circular dated September 4, 2025 (Ref. No. RW/NH-36094/07/2025-S&R(A&CC) Comp. No. 257562) (the “Circular”), clarifying the procedure and internal timelines for seeking extensions of arbitral mandates under the Arbitration and Conciliation Act, 1996 (the “Act”).

The Circular addresses persistent delays in processing extension requests, which often led to procedural complications, unnecessary litigation, and stalled dispute resolution. It prescribes a structured framework to ensure compliance with statutory deadlines and prevent disruptions in ongoing arbitration proceedings.

The Act prescribes strict timelines to promote time-bound resolution of disputes:

1. Parties must complete statements of claim and defence within six months from the arbitrator’s receipt of the notice of appointment.
2. The arbitral tribunal must deliver its award within twelve months of completion of pleadings.
3. Section 29A (3) allows parties to extend this period by up to six additional months by mutual consent.
4. Under Section 29A(4), if the award is not made within the initial or extended period, the arbitrator’s mandate terminates unless the court extends the period. Importantly, where an application under Section 29A(5) is pending before the court, the arbitrator’s mandate continues until disposal.

This legal framework reflects a dual mechanism: first, a party-driven extension, and second, a judicial safeguard against prolonged inaction.

Despite clear statutory provisions, MoRTH noted recurring delays in initiating and processing extension requests. These lapses often caused unnecessary litigation and hindered the timely resolution of disputes in highway projects an area where certainty and continuity are critical for project execution and investor confidence.

To address these challenges, MoRTH has laid out internal timelines and responsibilities for its regional and headquarters offices to ensure proactive action.

The Circular lays down the following clear-cut responsibilities and deadlines:

• Extension under Section 29A(3): Party-led Extension
  • Regional Officers (ROs) must forward proposals for extension to the concerned zone at MoRTH headquarters at least one month before the expiry of the initial twelve-month period under Section 29A (1).
  • Proposals must be approved by the Director General (Road Development) and Special Secretary before being finalized.
• Extension under Section 29A(4): Court-led Extension
  • Where further extension requires court intervention, a detailed application citing justifiable causes must be prepared and filed on behalf of the Authority.
  • Proposals for court applications must reach the Ministry’s headquarters at least two months before the expiry of the party-led extension period under Section 29A(3).

These directions ensure proactive handling of arbitral timelines, avoiding last-minute lapses and preserving the continuity of proceedings. By mandating advance planning and clear responsibilities, the circular ensures timely arbitration, prevents procedural lapses, and strengthens continuity of proceedings. It offers government agencies a procedural safeguard and assures contractors of predictable, time-bound dispute resolution bolstering investor confidence and reinforcing arbitration in highway contracts as a credible and efficient mechanism.