The High Court has partially set aside an arbitration award received by Kurukshetra Expressway Private Limited (KEPL), a joint venture of Kalpataru Projects International , against the National Highways Authority of India (NHAI). In its order dated July 28, 2026, the court upheld the awards on all claims except for the Termination Payment and interest thereon, which were set aside. This development resolves part of the long-standing dispute stemming from the termination of the Rohtak-Bawal section of NH-71 project in 2021 due to force majeure events caused by farmer agitations. The partial setback impacts the final settlement amount KEPL can claim from NHAI, though the majority of the awarded payments remain intact.

Kalpataru Projects International Limited disclosed the development on July 29, 2026, pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company stated that it received the High Court's order on July 28, 2026, at approximately 3:22 p.m. KEPL, in which Kalpataru holds a 49.57% equity stake, had originally received two arbitration awards in its favor from NHAI on August 16, 2024. These awards included various payments and a Termination Payment related to the road project terminated by KEPL in 2021.

Background of the Dispute

The dispute originated when KEPL issued a Notice of Termination to NHAI on October 7, 2021, citing the forcible suspension of toll collection due to farmer protests as a Force Majeure event under the Concession Agreement dated July 13, 2010. The agreement was for the four-laning of the Rohtak-Bawal Section of NH-71 in Haryana on a Design, Build, Finance, Operate and Transfer (DBFOT) basis. Following the termination, KEPL's account was treated as a Non-Performing Asset (NPA) after it failed to pay interest to its lenders in October 2021, having previously honored payments until the 89th day.

NHAI had challenged the original arbitration awards by filing an application under Section 34 of the Arbitration and Conciliation Act, 1996, serving advance copies to KEPL in December 2024. The current High Court order represents the latest procedural step in this legal battle. By setting aside only the Termination Payment and interest, the court has left all other financial claims awarded to KEPL undisturbed.

Key Details at a Glance

The following table summarizes the key milestones and parameters of the KEPL-NHAI dispute:

Legal Strategy and Next Steps

Based on legal advice, KEPL believes it has a strong case to challenge the portion of the award set aside by the High Court. The joint venture is taking appropriate legal steps, including preferring an appeal against the decision regarding the Termination Payment. The financial impact on Kalpataru Projects International Limited will depend on the outcome of this appeal and the eventual crystallization of the awarded claims to KEPL.

The partial setting aside of the Termination Payment highlights the lingering financial uncertainty surrounding the KEPL-NHAI dispute. While the upholding of all other claims suggests that significant portions of the debt due and adjusted equity may still be recoverable, the removal of the Termination Payment and interest reduces the immediate potential recovery value. The timeline indicates a prolonged resolution process, spanning from the initial termination notice in October 2021 to the High Court order in July 2026.

Kalpataru Projects International Limited has secured a favorable ruling from the Appellate Authority, which set aside a Goods and Services Tax (GST) order for the fiscal year 2019-20. The decision eliminates a total liability comprising a tax demand of ₹1.52 crore, interest of ₹0.70 lakh, and a penalty of ₹15.17 lakhs. This resolution removes a contingent liability that had been flagged in an earlier intimation dated August 29, 2024, thereby preventing immediate cash outflow and validating the company’s defense against excess input tax credit claims for that period.

The company received the appellate order on July 23, 2026, at approximately 04:19 P.M. (IST). The disclosure was made in compliance with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The original order had been issued by the GST Authority under Sections 73 and 74 of the State Goods and Services Tax Act, 2017, read with relevant provisions of the Central Goods and Services Tax Act, 2017.

Details of the Resolved Liability

The specific order set aside by the Appellate Authority pertained exclusively to the FY 2019-20 period. The financial components of the resolved demand are detailed below:

The primary allegation in the original order was the excess availment of Input Tax Credit (ITC). By setting aside this specific order, the Appellate Authority has nullified the requirement for Kalpataru Projects to pay these amounts for the specified fiscal year.

Context of Broader Dispute

While the FY 2019-20 matter has been resolved in favor of the company, the August 29, 2024 filing indicated broader disputes with various State GST Departments. The aggregate demands across all cited fiscal years (FY 2019-20, FY 2020-21, and FY 2021-22) included an aggregate tax amount of ₹2.97 crores, interest of ₹0.16 crores, and penalties of ₹1.61 crores. These broader allegations also cited time-barred availment of ITC and availment of ITC on blocked supplies.

What the Numbers Show

The resolution of the FY 2019-20 case represents a complete reversal of the assessed liability for that period. With the tax demand of ₹1.52 crore and associated costs removed, the immediate cash outflow risk associated with this specific vintage is eliminated. This outcome validates the company's defense strategy regarding input tax credit claims for that year, potentially strengthening its position in similar disputes across other fiscal years where allegations of excess ITC claims were also raised.