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 awards on all claims except for the Termination Payment and interest thereon, which were set aside. This development impacts the final settlement amount KEPL can claim from NHAI, though the majority of the awarded payments remain intact. The dispute stems from the termination of the Rohtak-Bawal section of NH-71 project in 2021 due to force majeure events caused by farmer agitations.

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 paid a penalty of ₹10.46 lakhs to the GST Authority on July 29, 2026, to secure the release of a vehicle detained during an inter-state goods transfer. The company disclosed that the payment was made to mitigate operational delays while it prepares to file an appeal against the authority’s actions, asserting that the penalty does not significantly impact its financial or operational activities.

The disclosure was made under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, on July 29, 2026, at approximately 11:05 a.m. IST. The company stated that no formal order or direction had yet been passed by the authority; however, the penalty was paid voluntarily to facilitate the immediate release of the detained asset.

Incident Details

The GST Authority detained a vehicle transporting goods from one project site to another across state lines. The authority alleged that the goods were not covered by valid documents. Kalpataru Projects submitted clarifications citing relevant provisions of the GST law but proceeded with the penalty payment to resolve the detention.

Financial and Operational Impact

Management indicated that the penalty amount is immaterial in the context of the company’s overall financial position. The disclosure explicitly states that the payment does not have any significant impact on the company’s financial, operational, or other activities. The primary consequence was the temporary detention of the vehicle, which was resolved upon payment.

Legal Recourse

Kalpataru Projects intends to challenge the detention and the associated penalty. The company confirmed it will file the necessary appeal against the actions taken by the GST Authority. This step suggests management views the initial detention as procedurally or substantively incorrect, despite the pragmatic decision to pay the penalty to avoid further operational disruption.