Section 34 challenges rarely succeed — which is what makes the ones that do instructive. In O.M.P. 463/2015, decided on 14 September 2026, the Delhi High Court set aside an award that had unwound a ₹62.10 crore toll-collection contract for National Highways 25 and 2, directing NHAI to refund ₹10.35 crore with 14.55% interest and pay further restitution. The court’s reason: the arbitrator declared the contract void and voidable while failing to consider the very clauses in which the contractor had accepted the risks it later called misrepresentation.
The contract and the collapse
NHAI awarded Sangam (India) Ltd. a toll-collection contract worth ₹62.10 crore for the Usaka/Chamari toll plaza on National Highways 25 and 2 in Uttar Pradesh. The commercial controversy centred on a 1.7 km stretch at Kalpi that remained incomplete. Collections disappointed; the relationship broke down; NHAI terminated the contract and blacklisted the contractor for two years. In arbitration, the contractor alleged misrepresentation and breach — and won an award declaring the contract void for uncertainty and voidable for misrepresentation, with a ₹10.35 crore refund carrying 14.55% interest and restitution of ₹332.05 lakh.
Why the award fell
The notification disclosed the condition
The tender notification expressly contemplated the incomplete Kalpi stretch. A condition disclosed in the bid documents cannot later found a plea of concealment or misrepresentation.
The contract allocated the risk
Site and traffic risks were assigned to the contractor by express clauses. The court’s formulation is the judgment’s core: a party cannot “accept detailed commercial allocation of risk… then retrospectively characterise the commercial outcome as uncertain or fraud.”
Ignoring vital clauses vitiates
The arbitrator’s conclusions of voidness and voidability were reached without engaging these provisions. An award blind to the contract’s dispositive terms is not a “possible view” — it is a decision on a contract the parties never made.
Where this sits in Section 34 doctrine
| Challenge type | Outcome under settled law |
|---|---|
| Disagreement with the arbitrator’s appreciation of evidence | Fails — re-appreciation is barred |
| Alternative interpretation of an ambiguous clause | Fails — the arbitrator’s plausible construction binds |
| Award ignoring vital evidence or dispositive contract terms | May succeed — perversity / patent illegality |
| Award rewriting the parties’ risk allocation | May succeed — the tribunal draws authority from, and is confined by, the contract |
Contrast this outcome with the same court’s dismissal, a day later, of the Delhi Jal Board’s challenge to a delay award grounded in the hindrance register. Read together, the two judgments mark the boundary precisely: findings anchored in the record and the contract are protected; conclusions reached past the contract are not.
Drafting and litigation pointers
For employers and concessionaires alike, the case underlines the litigation value of disclosure and allocation language: conditions disclosed in the NIT and risks expressly assigned in the agreement operate as insurance against later void-and-refund theories. For contractors, the discipline is at the bidding stage — quantify the disclosed condition and price it, or qualify the bid — because sympathy for a losing bargain does not survive Section 34 when the paper trail shows acceptance. For counsel challenging awards, the judgment is a template: identify the specific clauses and documents the tribunal never engaged, and frame the challenge as jurisdictional blindness rather than as disagreement with findings.
Core holding: an arbitral award declaring a contract void or voidable, reached without considering the tender disclosures and risk-allocation clauses that answer the plea, cannot stand under Section 34.
This article is for general information only and is not legal advice. Award-challenge limitation under Section 34 is three months (plus a capped 30 days); affected parties must act immediately on receipt of an award.
Frequently Asked Questions
What was the arbitral award that got set aside?
The arbitrator held the toll-collection contract void for uncertainty and voidable for misrepresentation — centred on a 1.7 km incomplete highway stretch at Kalpi — and directed NHAI to refund ₹10.35 crore with 14.55% interest plus about ₹3.32 crore as restitution, after NHAI had terminated the contract and blacklisted the contractor.
On what ground did the High Court interfere?
Failure to consider critical contractual provisions. The tender notification expressly contemplated the incomplete stretch, and the contract allocated site and traffic risks to the contractor. An award that ignores such vital material is vitiated — one of the recognised species of patent illegality and perversity under Section 34.
Is this not merits review by another name?
No. Courts do not re-weigh evidence, but an arbitrator who overlooks the contract’s dispositive clauses decides a different dispute from the one the parties created. The line runs between a wrong-but-considered view (protected) and a view formed without considering vital terms (vulnerable).
What is the message for infrastructure contractors?
Price the disclosed risk. Where tender documents disclose a condition — an incomplete stretch, traffic variability — and the contract assigns that risk, a later claim of fraud or uncertainty founded on the same condition is unlikely to survive, whatever a tribunal first says.