Retired Justice Hima Kohli calls for statutory protection of government officers releasing disputed funds

A statutory framework for interim payments in construction disputes can protect government and PSU officials who release contested funds from vigilance, audit and investigative scrutiny, former Supreme Court Justice Hima Kohli said during the Delhi leg of India ADR Week 2026.

Justice Kohli said that officers often avoid taking commercial decisions on disputed payments because the responsibility for releasing public money falls directly on them.

“Keeping in mind that 70% or more of Indian infrastructure involves government agencies and PSUs, statutory backing becomes essential. In PSUs and government bodies, individual officers are hesitant to release disputed interim funds on their own discretion because the responsibility and scrutiny fall directly on their shoulders. A statute provides statutory cover and institutional protection to these officers, mandating interim payments under a clear legal procedure rather than leaving them vulnerable to accusations of impropriety,” she said.

She added that without such statutory backing, officers may prefer to push disputes into prolonged arbitration rather than take a commercial call to release funds and keep project cash flow moving.

Justice Kohli was speaking during a session on interim payments and interim relief in construction disputes. The panel was moderated by Ananya Kumar, Partner at JSA Advocates & Solicitors, and also featured Avinash Pradhan, Partner at Rajah & Tann and Christopher & Lee Ong; Mukul Shastry, Group General Counsel at Cube Highways; and Priyanka Kapoor, Partner at Fieldfisher.

Justice Kohli said that uninterrupted cash flow was critical to construction projects because contractors incur substantial upfront costs and must continue paying sub-contractors and suppliers even while disputes remain pending.

“Any restriction or blockage of cash flow while construction is active risks stalling or completely killing the project,” she said.

She pointed to jurisdictions such as the United Kingdom, Singapore and Hong Kong, which have statutory adjudication mechanisms aimed at ensuring that payment disputes do not derail ongoing projects. India, by contrast, largely relies on interim relief under Sections 9 and 17 of the Arbitration and Conciliation Act and provisions of the Code of Civil Procedure.

The former judge said that these remedies were not specifically designed as rapid interim-payment mechanisms.

She added that courts must balance equities while considering such relief. Where there is a certified amount or a clear admission of work completed, courts can devise conditional arrangements such as payment against a bank guarantee or deposit in court.

At another India ADR Week session, Senior Advocate Jayant Mehta said that Indian courts considering enforcement should not ordinarily permit an award debtor to re-argue factual or legal grounds already fully argued and conclusively decided by the supervisory court at the arbitral seat.

He was speaking at a panel moderated by Mayank Mishra, Partner at CMS INDUSLAW, which also included Kushal Gandhi, Partner at CMS (UK); Steven Lim, Arbitrator and Barrister at 39 Essex Chambers; and Urvashi SaiKumar Pathak, SVP & Legal Head at Axis Max Life Insurance.

Separately, an energy disputes panel moderated by Vishrov Mukerjee, Partner at Trilegal, featured Bitika Kaur of Apraava Energy, Mahesh Vipradas of Sembcorp, Namrata Arora of BluPine Energy and Sunei Kapur of Resolven.

The panel also discussed whether arbitration could offer a more effective way of resolving some disputes in India’s rapidly evolving power and renewable energy sector, particularly as existing regulatory forums grapple with increasing caseloads and delays.