The court affirmed that compensation under Article XXXVI of the Concession Agreement is warranted when a change in law, such as demonetization, disrupts contractual rights, allowing for reasonable loss calculation based on historical data.

JUDGMENT

C. Hari Shankar, J.

1. The National Highways Authority of India (NHAI), by means of the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (the 1996 Act) assails an award dated 6 February 2020, passed by a learned three-member Arbitral Tribunal, whereby the respondent, GVK Jaipur Expressway Pvt. Ltd. (GVK), has been awarded Rs. 21,75,45,640/- along with costs of Rs. 44,76,775/-.

Facts

2. On 3 May 2000, proposals were invited by NHAI from interested bidders for expanding and widening a stretch of the Jaipur- Kishangarh section of NH-8 ("the Project Highway"). The bid offered by a consortium of GVK International NV and M/s B. Seenaiah and Company (Project) Ltd. was accepted by NHAI vide a letter of acceptance (LoA) dated 1 March 2002.

3. As required by the LoA, GVK was incorporated by the consortium to enter into a Concession Agreement (CA) with NHAI. On 8 May 2002, NHAI and GVK entered into the CA for execution of the work of widening of the Project Highway on build, operate and transfer (BOT) basis.

4. The following clauses of the CA are relevant:

"1.2 In this Agreement, unless the context otherwise requires,

(b) references to Indian law shall include the laws, acts, ordinances, notifications, rules, regulations, or bye laws which have the force of law in any State or Union Territory forming part of the Union of India.

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1.4.2 In case of ambiguities or discrepancies within this Agreement the following shall apply:

(i) between two Clauses of this Agreement, the provisions of the specific clause relevant to the issue under consideration shall prevail over those in other Clauses;

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3.1 Subject to and in accordance with the terms and conditions set forth in this Agreement, NHAI hereby grants to the Concessionaire and the Concessionaire hereby accepts the concession for a period of 20 (twenty) years commencing from the Appointed Date. Including the exclusive right, license and authority during the subsistence of this Agreement to implement the Project and the Concession in respect of the Project Highway.

3.2 Subject to and in accordance with the terms and conditions set forth in this Agreement, the Concession hereby granted shall entitle the Concessionaire to enjoy, and oblige the Concessionaire to undertake the following in accordance with the provisions of this Agreement, the Applicable Laws and the Applicable Permits:

(i) to develop, design, engineer, finance, procure, construct, operate and maintain the Project Highway during the Concession Period;

(ii) upon completion of the Project Highway and during the Operations Period to manage, operate & maintain the Project Highway and regulate the use thereof by third parties;

(iii) levy, demand, collect and appropriate the Fee from vehicles and persons liable to payment of Fee for using the Project Highway or any part thereof and refuse entry of any vehicle to the Project Highway if the due Fee is not paid;

(iv) perform and fulfill all of the Concessionaire's obligations under this Agreement;

(v) bear and pay all expense, costs and charges incurred in the fulfillment of all the Concessionaire's obligations under this Agreement;

(vi) not to assign or create any lien or Encumbrance on the Concession hereby granted or on the whole or any part of the Project Highway nor transfer, lease or part possession therewith save and except as expressly permitted by this Agreement or the Substitution Agreement.

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6.1 The Concessionaire shall be entitled during the Operations Period to levy, collect and appropriate the Fee from the users of the Project Highway pursuant to and in accordance with the Fee Notification set forth in Schedule `G' and this Agreement.

Provided, however, that such Fee shall be rounded off to the nearest Five Rupees for ensuring ease of payment and collection.

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VII Concession Fee and Excess Revenue Sharing

7.1 In consideration of the grant of Concession under this Agreement the Concessionaire agrees to pay a fee of Rupee one per annum ("Concession