KMP Expressway: SC refers banks plea to arbitration tribunal

The Supreme Court today referred the plea of IDBI and State Bank of India to settle their claim of over Rs 1,400 crore against a concessionairre, which failed to expedite the Kundli-Manesar-Palwal (KMP) Expressway, to an arbitration tribunal.
The two banks had moved the apex court after Haryana government's decision to change the contractor, claiming that new project proponent has been engaged without protecting the interest of the banks.
"All disputes between the lender banks, Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) and outgoing concessionaire-KMP Expressways Ltd arising out of or in relation to the tripartite agreement dated January 8, 2007 executed between the parties shall stand referred to the arbitral tribunal headed by Justice N K Sodhi," a bench comprising Chief Justice T S Thakur and Justice R Banumathi said.

The court asked both banks, HSIIDC and KMP Expressways Ltd to file their "claims and counter claims" before the arbitration tribunal who "shall then adjudicate upon and decide the same in accordance with the law giving each one of them an opportunity of being heard in the matter."
Noting that over 52 km of stretch in the Expressway has been completed "in part" by the outgoing concessionaire and toll was being collected for the same, the bench directed that eighty per cent of the amount collected be deposited in an escrow account to be opened in IDBI bank.
"The said amount shall then be available to the arbitral tribunal for disbursement to lender banks by way of an interim arrangement or otherwise as it may consider appropriate after hearing the parties," the bench said.

It further asked HSIIDC to appoint a committee of engineers/experts for measurement of the work done on Kundli-Manesar (0.00km-83.320km) and Manesar-Palwal (83.320km-135.650km) by the outgoing concessionaire.

"The report shall be filed before the arbitrators within four weeks from the date of this order. The outgoing concessionaire, the lender banks and the new concessionaire shall associate with the process of measurement of the work," the court said.
The apex court had in January last year directed Haryana government to award within two months fresh contracts for the construction of the 136-km Kundli-Manesar-Palwal (KMP) Expressway and ensure resumption of work within three months.

Expressing displeasure over the pace work on the project, the court had said that at this rate it might take another two decades for its completion, which was not acceptable.