Image Source : The Hindu Business Line
In a significant development within India’s infrastructure and construction sector, ITD Cementation India Ltd and Reliance Infrastructure Ltd have officially terminated ongoing arbitration proceedings related to a long-standing contractual dispute. The resolution marks the end of a contentious legal chapter and signals a move toward operational clarity and financial closure for both entities.
Background of the dispute
- The arbitration stemmed from a subcontracting agreement between ITD Cementation and Reliance Infra concerning the Pune-Satara highway project under the National Highways Authority of India
- ITD Cementation was appointed as a construction contractor by Reliance Infra, which held the primary concession for the project
- Disputes arose over alleged breaches of contract, invocation of bank guarantees, and payment obligations, leading to legal proceedings in the Bombay High Court as early as 2014
- ITD Cementation had sought injunctions to restrain Reliance Infra from invoking certain bank guarantees, citing fraudulent conduct and irretrievable injury
Termination of arbitration proceedings
- On August 1, 2025, both companies jointly announced the termination of arbitration proceedings, indicating that the matter has been resolved outside the tribunal framework
- The termination was filed with the relevant arbitration authority and acknowledged by both parties in regulatory disclosures
- No further claims or counterclaims will be pursued under the original arbitration reference, effectively closing the dispute
- The resolution is expected to release blocked financial guarantees and reduce contingent liabilities on both balance sheets
Implications for ITD Cementation
- The termination removes a key legal overhang for ITD Cementation, allowing the company to focus on its core EPC and marine infrastructure projects
- It also improves the company’s risk profile and may positively impact its credit rating and borrowing costs
- With the dispute resolved, ITD Cementation can redirect resources toward new bids and project execution, particularly in metro rail and port development segments
- The company has recently secured new orders worth over Rs 1,200 crore, reinforcing its growth trajectory
Impact on Reliance Infrastructure
- For Reliance Infra, the closure of arbitration proceedings aligns with its broader strategy to streamline operations and reduce legal entanglements
- The company has been actively restructuring its EPC and infrastructure portfolio, including monetization of assets and debt reduction
- Terminating the arbitration allows Reliance Infra to focus on its energy and transport verticals, including metro rail operations and renewable energy ventures
- The move may also support its efforts to attract strategic investors and improve shareholder sentiment
Legal and industry context
- The resolution reflects a growing trend among infrastructure firms to settle disputes outside formal arbitration, driven by cost, time, and reputational considerations
- Recent Supreme Court rulings have emphasized minimal judicial interference in arbitral awards, encouraging parties to seek negotiated settlements
- Industry experts view the termination as a pragmatic step that avoids prolonged litigation and unlocks operational bandwidth for both companies
Conclusion
The termination of arbitration proceedings between ITD Cementation and Reliance Infrastructure marks a constructive shift in dispute resolution within India’s infrastructure sector. By closing a decade-old legal matter, both companies signal their intent to prioritize growth, financial discipline, and stakeholder value in an increasingly competitive environment.
Sources: Bombay High Court filings, CaseMine, SooperKanoon, Mondaq Arbitration Review
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