Covid-19 impact: Conciliation claims gain traction among road firms

Industry players say liquidity crunch after Covid-19 a reason for change

The combined value of settlement payouts by the National Highways Authority of India (NHAI) is increasing, indicating that road companies might increasingly be choosing the conciliation route for claims. 

Debt resolution, Covid-related liquidity concerns, and a long legal process acting as deterrent are some reasons pushing firms to pursue conciliation. At present, HCC, Sadbhav Engineering, Ashoka Buildcon, and Infrastructure Leasing & Financial Services (IL&FS) are pursuing this process. 

Besides, conciliation is an easier and fairer process for companies already facing liquidity issues and cannot offer a bank guarantee to avail of 75 per cent of arbitration award at a later stage. 

“One can