Advocating Legal Protection for Government Officials in Interim Payment Decisions
During a session at the India ADR Week 2026 in Delhi, retired Supreme Court Justice Hima Kohli emphasized the necessity for a statutory framework to protect government and public sector undertaking (PSU) officials who authorize interim payments in construction-related disputes. Justice Kohli highlighted the challenges these officials face, including potential scrutiny from vigilance, audit, and investigative bodies, when disbursing contested funds.
Justice Kohli noted that in India, where government agencies and PSUs are involved in over 70% of infrastructure projects, statutory protection becomes crucial. “Officers are often reluctant to make commercial decisions regarding disputed payments due to the direct accountability and scrutiny they face. A legal statute would provide a protective shield, ensuring that interim payments are made through a defined legal process, thus safeguarding officers from accusations of wrongdoing,” she remarked.
Without such legal backing, Justice Kohli warned, government officials might hesitate to approve necessary interim payments, opting instead to defer disputes to lengthy arbitration processes, which can disrupt cash flow and delay project completion.
Discussion on Interim Payments and Construction Disputes
The session, focused on interim payments and relief in construction disputes, was moderated by Ananya Kumar, Partner at JSA Advocates & Solicitors. The panel included prominent figures like Avinash Pradhan, Partner at Rajah & Tann and Christopher & Lee Ong; Mukul Shastry, Group General Counsel at Cube Highways; and Priyanka Kapoor, Partner at Fieldfisher.
Justice Kohli underscored the importance of uninterrupted financial flows in construction projects, highlighting that contractors face significant upfront costs and must maintain payments to sub-contractors and suppliers, even amidst unresolved disputes. “Any hindrance to cash flow during active construction poses a risk of project delays or failure,” she stated.
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She referenced jurisdictions such as the United Kingdom, Singapore, and Hong Kong, which have implemented statutory adjudication systems to prevent payment disputes from halting projects. In contrast, India predominantly relies on interim relief under Sections 9 and 17 of the Arbitration and Conciliation Act, alongside provisions of the Code of Civil Procedure. According to Justice Kohli, these remedies lack the specific design needed for swift interim-payment solutions.
Balancing Equities in Interim Relief
Justice Kohli stressed the need for courts to balance equities when granting such relief. In cases where amounts are certified or work completion is acknowledged, courts can establish conditional measures, such as payments against bank guarantees or deposits in court.
Insights from Other ADR Week Sessions
At another session, Senior Advocate Jayant Mehta expressed that Indian courts should generally avoid allowing award debtors to re-litigate factual or legal issues already addressed and settled by the supervisory court at the arbitral seat. This panel, moderated by Mayank Mishra, Partner at CMS INDUSLAW, featured discussions with experts including Kushal Gandhi, Partner at CMS (UK); Steven Lim, Arbitrator and Barrister at 39 Essex Chambers; and Urvashi SaiKumar Pathak, SVP & Legal Head at Axis Max Life Insurance.
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An additional panel focusing on energy disputes, led by Vishrov Mukerjee, Partner at Trilegal, included Bitika Kaur of Apraava Energy, Mahesh Vipradas of Sembcorp, Namrata Arora of BluPine Energy, and Sunei Kapur of Resolven. The panel explored the potential of arbitration as a more efficient dispute resolution method within India’s evolving power and renewable energy sectors, especially as existing regulatory frameworks struggle with increasing caseloads and delays.
