The Ministry of Road Transport and Highways is considering a new tiered arbitration fee structure to reduce the financial burden on the National Highways Authority of India (NHAI) while making dispute resolution more efficient. The proposal comes as NHAI continues to face a large number of arbitration cases related to highway construction projects, resulting in significant legal costs and mounting debt.
Under the proposed model, arbitration fees would be linked to the value of the dispute instead of following a uniform payment structure. Smaller claims would attract lower fees, while higher-value disputes would have proportionately higher payouts. Officials believe this approach can make arbitration more transparent, cost-effective and aligned with the complexity of each case.
The government is also exploring ways to encourage mediation and conciliation before disputes escalate into lengthy arbitration proceedings. Faster settlements could reduce project delays, improve cash flow for contractors and help NHAI manage its liabilities more effectively. Industry experts say such reforms could strengthen investor confidence by creating a more predictable dispute resolution framework.
As India continues to expand its national highway network, efficient handling of contractual disputes has become increasingly important. If implemented, the revised arbitration fee mechanism could lower litigation expenses, speed up project execution and support the government’s broader infrastructure development goals while easing the financial pressure on NHAI.
