Road Transport Ministry Revises Highway Contracts, Bars Arbitration For ₹10 Crore-Plus Disputes

Disputes valued at Rs 10 crore or more, as well as declaratory and non-monetary disputes, under national highway contracts will no longer be referred to arbitration, under a circular issued by the Ministry of Road Transport and Highways on January 12, 2026. Such disputes will instead be dealt with through conciliation, without barring the parties from approaching civil courts.

The circular updates the dispute resolution clauses in standard contracts used for Build-Operate-Transfer (Toll), Hybrid Annuity Model and Engineering, Procurement, and Construction projects. It says the revised provisions will take effect immediately and replace the existing clauses, while making it clear that arbitration cases already in progress will continue under the earlier framework.

The change has been made in line with guidelines issued by the Ministry of Finance on June 3, 2024 on arbitration and mediation in domestic public procurement contracts.

Through the circular, the existing dispute resolution chapters in the relevant contracts have been replaced by a newly drafted chapter annexed to the communication.

Under the revised framework, claims valued below Rs 10 crore may continue to be referred to institutional arbitration, either before the Society for Affordable Redressal of Disputes or the India International Arbitration Centre. Arbitration has, however, been expressly excluded for disputes of ₹10 crore or more and for declaratory or non-monetary disputes.

Clause 3.6 of the amended chapter states, “Notwithstanding anything to the contrary contained in the Agreement, it is agreed that any Dispute between the Parties, the sum of which is of value equal to or above Rupees 10 Crores shall not be referred to Arbitration.”

It further clarifies that nothing in the agreement prevents the parties from “seeking resolution of such Disputes through civil courts.”

The amended dispute resolution provisions also state that contractual obligations will remain in force during the dispute resolution process and that the parties must continue performing their respective obligations pending resolution of disputes.