Analysis of Roadway Solutions India Infra vs NHAI

1. The parties entered into a Contract dated October 17, 2022 for the execution of the highway project inter alia the original Scheduled Completion Date was January 12, 2025.

2. Disputes arose regarding delay in execution. The petitioner attributed the delay to the respondent’s failure to provide right of way under clause 8.1, non-availability of continuous work fronts and delays in obtaining approvals. The respondent attributed the delay to the petitioner’s failure to deploy adequate resources, maintain the highway stretch and comply with contractual and safety obligations.

3. The petitioner sought extension of time under Clause 10.5(ii), pursuant to which the respondent’s engineer recommended an extension of 474 days. The parties thereafter executed a settlement agreement dated April, 25, 2025, revising the Scheduled Completion Date to April 30, 2026 and Milestone-III to January 11, 2026.

4. Disputes nevertheless continued. On January 2, 2026, the respondent issued a cure period notice alleging defaults and granting 60 days to cure them. The petitioner disputed the allegations, contending that the notice was premature, the respondent’s continuing defaults had not been considered, and its request for further extension remained pending.

5. After expiry of the cure period and unsuccessful attempts at resolution, the respondent issued a notice of intention to terminate dated July, 16, 2026 under Clause 23.1(ii). The petitioner consequently approached the Court under Section 9 of the Arbitration and Conciliation Act, 1996, seeking restraint against further action pursuant to the termination notice.

i. Whether the contract is a determinable contract?

ii. Whether the petitioner has been able to make out a prima facie case and a case for Balance of convenience warranting restraint against the Respondent, pending arbitration, from acting upon the Notice of Intention to Terminate dated July, 16, 2026?

iii. The relevance of Sections 20A and 41(ha) SRA (public infrastructure projects) to the grant of interim relief u/s 9 of the Arbitration Act.

The Court confined the Section 9 proceedings to the petitioner’s prayer seeking restraint against the respondent from acting upon the notice of intention to terminate dated July 16, 2026. It reiterated that Section 9 is protective in nature and aims to preserve the subject matter of arbitration and prevent the proceedings from becoming infructuous. Interim relief depends upon a prima facie case, balance of convenience and irreparable injury.

Accordingly, Section 14(d) of the Specific Relief Act, 1963 stipulates that a contract determinable in nature cannot be specifically enforced, while Section 41(e) provides that an injunction cannot be granted to prevent breach of a contract that cannot be specifically enforced. The Court examined Clause 23 and held that termination was not an unconditional right exercisable at NHAI's discretion. It could be exercised only upon specified Contractor defaults, followed by notice and the applicable cure period. Relying principally on the Supreme Court’s judgment in K.S. Manjunath v. Moorasavirappa, the Court distinguished contracts terminable at will or without cause from contracts terminable only upon specified defaults after notice and an opportunity to cure. The latter are not rendered “determinable” merely because they contain a termination clause. Accordingly, Clause 23 did not make the EPC Contract inherently determinable under Section 14(d), and the Contract was held not determinable in nature.

However, clearing the Section 14(d) hurdle was necessary but not sufficient in this case. The Court was explicit that this only "removed the statutory objection based on determinability”, it did not entitle RSIL to any interim relief. Applying the settled Section 9 triad (prima facie case, balance of convenience, irreparable injury), drawing on Arcelor Mittal Nippon Steel (India) Ltd. v. Essar Bulk Terminal Ltd., the Court ruled against RSIL.

The Court rejected the contention that the cure period notice was necessarily premature merely because Milestone-III had not fallen due. Its validity had to be assessed with reference to the defaults specifically invoked. Since the notice granted 60 days to cure the alleged defaults and the notice of intention to terminate was issued only on July, 16, 2026, after expiry of the cure period, the petitioner could not prima facie establish that the contractual cure period had been curtailed.

Whether the alleged defaults were committed was held to be a matter for the Arbitral Tribunal. The Section 9 proceedings could not be converted into a forum for deciding the merits of the contractual disputes. The Court was therefore concerned only with whether the requirements for interim relief were satisfied.

The Court further considered the public infrastructure aspect under Sections 20A and 41(ha) of the Specific Relief Act, which restricts injunctions that would impede or delay infrastructure projects. As the contract concerned the construction of a highway, the public interest in timely completion had to be balanced against the petitioner’s contractual rights. Relying on NHAI v. Roadway Solutions India Infra Limited, the Court held that termination of highway contracts should ordinarily not be stayed under Section 9, as wrongful termination could subsequently be compensated through arbitration, whereas delay in completion of a highway causes larger public loss. The Court considered this principle applicable to the present case. Relying also on NG Projects Ltd. v. Vinod Kumar Jain, the Court emphasised that courts should exercise restraint in interfering with public infrastructure projects and should not grant interim orders which derail projects undertaken for larger public benefit.

Accordingly, although the contract was held to be not determinable in nature, the petitioner failed to establish a prima facie case for restraining the respondent from acting upon the notice of intention to terminate.

In view of Sections 20A and 41(ha), the balance of convenience favoured the respondent and the public at large, while the petitioner’s alleged injury was principally commercial and capable of monetary compensation. The interim relief was therefore declined and the petition dismissed, with all observations expressly confined to the Section 9 proceedings and the parties’ rights before the Arbitral Tribunal kept open.

This is a significant, contractor-friendly judgment for standard-form EPC/ infrastructure contracts and continues a doctrinal trend (also visible in Jumbo World Holdings, TO Abraham, Narendra Hirawat) away from the older, broader Delhi High Court position in Turnaround Logistics v. Jet Airways and Ksheeraabd Construction v. NHIDCL, which had treated any for-cause termination clause as sufficient to render a contract determinable. Manjunath (supra) and now this decision applying it to an EPC contract effectively narrows Section 14(d) to contracts terminable at will, restoring textual fidelity to the phrase "in its nature determinable."

About the author: Faranaaz Karbhari is a Counsel at HSA Advocates.

Disclaimer: The opinions expressed in this article are those of the author(s). The opinions presented do not necessarily reflect the views of Bar & Bench.

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