"IRB Infrastructure Trust Secures Arbitration Award of Rs. 1,720 Crore"

Yedeshi Aurangabad Tollway Ltd (YATL), a special purpose vehicle (SPV) of IRB Infrastructure Trust, has emerged victorious in an arbitration battle against the National Highways Authority of India (NHAI), securing an arbitration award of Rs. 1,720 crore for a highway project, as per an official statement released on Sunday.

The dispute arose when YATL initiated arbitration proceedings against NHAI, following the authority's disagreement with the company's claim for a concession period extension of 870 days and compensation totaling Rs. 1,751 crore. IRB Infrastructure Developers Ltd, acting as the sponsor of IRB Infrastructure Trust, served as the EPC contractor for YATL and continues to function as the project manager for the tollway.

The arbitration centered around compensation owed to IRB due to time and cost overruns incurred during the construction period, primarily attributed to delays caused by NHAI and certain Force Majeure events. Following a thorough examination of both sides, the Arbitration Tribunal directed NHAI to pay a compensation amounting to Rs 1,720 crore, inclusive of interest payable as of the date of the award.

Additionally, the Arbitration Tribunal mandated NHAI to extend the concession period by 689 days, according to the statement. YATL, formed by IRB for the implementation of the Yedeshi Aurangabad NH211 BOT highway project, executed the concession agreement in May 2014. Commencing construction in July 2015, the project, initially slated for completion within 910 days by December 26, 2017, faced delays due to issues such as land handover delays and NHAI-related factors. The project was ultimately completed on September 24, 2020.

As a consequence of the delays, YATL incurred both time and cost overruns, leading to a compensation claim from NHAI on March 12, 2021. With NHAI disputing the claim, the matter proceeded to arbitration, culminating in the recent award in favor of YATL.

ET