The combined value of settlement pay-outs 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 IL&FS are pursuing this process.
Besides, conciliation is an easier and fairer process for companies that already face liquidity issues and cannot offer a bank guarantee to avail of 75 per cent of arbitration award at a later stage. “One can resolve claims within six months without going through legal hassles and unlock capital stuck for growth,” said Ratnam Raju, associate director, group head, infrastructure and project finance, CARE Ratings.
