The Indian government has launched a proactive initiative to clear a significant bottleneck slowing down the country's ambitious highway development program. A new dedicated panel has been constituted to swiftly resolve small-value contractual disputes, worth an estimated ₹20,000 crore, that have been clogging the system and delaying projects.
New Pre-Conciliation Committee: A Focus on Small Claims
The Ministry of Road Transport and Highways (MoRTH) has set up an early dispute resolution panel, termed a pre-conciliation committee. Its primary mandate is to settle disagreements valued under ₹5 crore between highway contractors and government authorities like the National Highways Authority of India (NHAI). The goal is to address these issues before they escalate into prolonged and expensive legal battles in courts or arbitration.
This development is critical as these relatively minor disputes constitute about a fifth of the nearly ₹1 trillion in legal claims the government has faced in the road sector over the past decade. Officials highlight that even sub-₹1 crore disputes can take 6-7 years to resolve, during which accrued interest and legal costs can balloon the government's final liability far beyond the original claim amount.
The Mounting Cost of Delayed Justice
Legal expert Anuradha Mukherjee of Cyril Amarchand Mangaldas cited a stark example: a ₹27.5-lakh unpaid bill in a Karnataka PWD project. After years of delay, with added interest and enforcement costs, the court ultimately directed a recovery of approximately ₹1.2 crore. This pattern underscores a broader challenge where prolonged litigation continues to drain public funds. In the last ten years, the government has faced adverse arbitration awards exceeding ₹30,000 crore.
The move aligns with MoRTH's focused drive to curb its legal expenses through a structured, three-tier resolution mechanism. Cases must now first go through mediation and conciliation before reaching the Dispute Resolution Board (DRB) for arbitration. "The government feels that if small disputes are taken off from the arbitration and resolved separately, it would unburden the stretched arbitration system and allow for faster resolution of large-value disputes," a government official stated anonymously.
Addressing the Root Causes of Disputes
The context for this intervention is worrying. As of December 17, the road ministry informed the Rajya Sabha that 574 national highway projects awarded in the past five years, with a cumulative cost of around ₹3.60 trillion, have missed their completion deadlines. Furthermore, construction has not even begun on 133 projects worth about ₹1 trillion.
A second official noted that many such delayed projects hold the potential for future disputes. The new conciliation mechanism aims to prevent this litigation and facilitate completion. The industry body National Highway Builders Federation (NHBF), in a December 2025 representation, pointed to core issues like deficient project reports, delayed approvals, and arbitrary field-level interpretations. They emphasized the need for an accountability framework for engineers and officials whose actions often trigger disputes.
This initiative is part of a larger government push for efficient dispute resolution. In June 2024, the finance ministry advised all government entities to avoid arbitration in public procurement cases valued over ₹10 crore, favoring mediation as a cheaper and faster alternative. By tackling small disputes early, MoRTH hopes to unclog the pipeline, accelerate infrastructure delivery, and ensure taxpayer money is spent on building roads, not fighting legal battles.
