Right to recover damages as per contractual agreements is independent of prior remedial measures, allowing unilateral calculations by authorities for damages under specified articles.

JUDGMENT

[VIA HYBRID MODE]

Sanjeev Narula, J. (Oral)--The present petition under Section 9 of the Arbitration and Conciliation Act, 1996 [hereinafter, "the Act"] has been filed seeking interim measures pending constitution of the Arbitral Tribunal against coercive recovery by NHAI towards damages due to failure of repair and maintenance work on project assets.

THE DISPUTE

2. The facts leading to the present petition are as follows:

2.1. Petitioner-Bamanbore Tollway Private Ltd. [hereinafter, "BTPL"] and Respondent No. 1-National Highways Authority of India [hereinafter, "NHAI"] entered into a Concession Agreement dated 26th April, 2018 inter alia for `Tolling, Operation, Management, Maintenance & Transfer of National Highway stretch of Bamanbore to Garamore Section (from km 182+600 to km 254+537) of NH8A' [hereinafter, `Project Highway'] in Gujarat on a Toll-Operate-Transfer (`TOT') Basis for a period of 30 years.

2.2. Pursuant to a joint-inspection carried out on 25th April, 2020 along with representatives of BTPL, the Independent Engineer [hereinafter, "IE"], vide letter dated 27th April, 2020, listed out defects in the work that required repair and maintenance. Subsequently the damages were quantified and proposed at Rs.1,55,652/- in compliance with Article 15.8.1(b) of the Concessionaire Agreement. This was followed by another communication dated 18th August, 2020, wherein the IE, pursuant to inspection carried out at the project site on 12th August, 2020, listed out further defects. On the basis of said defects, the IE proposed that damages under Clause 15.8.1(b) be fixed at Rs.2 lacs per day, till the repair work was completed by BTPL.

2.3. BTPL responded to the afore-noted communications vide letter dated 24th August, 2020 contending that defects had been rectified. It submitted a compliance report to that effect, enclosing photographs of repairs carried out. In the meantime, NHAI on 31st March, 2021, on basis of the letter of IE proposing the damages, called upon the Petitioner to make a payment of Rs.4,09,55,652/- as per Article 15.8.1. BTPL vide letters dated 7th April, 2021 and 9th June, 2021, refuted all allegations levelled against it in detail, and also called upon NHAI to withdraw the Demand Notice dated 19th June, 2020.

2.4. NHAI issued an escrow invocation letter dated 2nd November, 2021 threatening recovery of an amount of Rs.4,09,55,652/- from an escrow account No. 038305001943 maintained by BTPL at ICICI Bank, Chembur Basant Cinema Branch, Mumbai.

2.5. In this background, BTPL has filed the present petition seeking interim protection of restraining NHAI from coercive recovery of damages from the aforesaid escrow account or such other means.

3. Mr. Nakul Dewan, Senior Counsel for BTPL, states that the action of NHAI is completely arbitrary and unreasonable, and makes the following submissions:

3.1. The action of NHAI for recovering damages from the escrow account is contrary to contractual terms. NHAI's right to remedial measures is stipulated under Article 15.9 of the Concessionaire Agreement, which reads as follows:

"15.9 Authority's right to take remedial measures