KUALA LUMPUR (Jan 9): Sunway Construction Group Bhd (SunCon) and the National Highway Authority of India (NHAI) have reached a settlement regarding the East West Corridor highway construction project, with NHAI agreeing to pay 375.32 million rupees (RM20.96 million) to Sunway Construction Sdn Bhd (SCSB), a wholly-owned unit of SunCon.

The settlement marks the resolution of all claims and disputes related to the project, namely on Package EW-II (RJ-9), involving the rehabilitation and upgrading of NH-76 from Km406 to Km449.15 in the state of Rajasthan, SunCon said.

The disbursement of the settlement amount would occur within one month from the execution of the agreement, in accordance with the outlined terms, it said.

Both NHAI and SCSB mutually consented to withdraw any ongoing litigations, arbitral proceedings, or conciliation proceedings as part of the settlement agreement, it added.

To recap, SunCon initially received the NH-76 highway project contract in 2005, leading to separate arbitration proceedings against NHAI due to various disputes.

In Nov 1, 2009, SunCon claimed 43.1 million rupees (RM2.41 million) for completing the fly ash construction for the highway embankment. The Arbitral Tribunal granted SunCon the amount on June 28, 2011. However, NHAI appealed to the High Court of Delhi, with the petition dismissed on May 23, 2012. SunCon appealed to the Supreme Court of India, resulting in the appeal being allowed on Aug 24, 2023.

In a separate arbitration on Nov 4, 2012, SunCon claimed 310.35 million rupees (RM17.33 million) against NHAI for losses and expenses due to delays in the extended project year. The Arbitral Tribunal awarded SunCon the sum on April 29, 2014, after which NHAI appealed to the High Court.

On June 3, 2020, SunCon issued a letter to NHAI expressing the intention to explore an amicable resolution of disputes through the Conciliation Committee of Independent Experts (CCIE).

The settlement falls under the Vivad se Vishwas – II (Contractual Disputes) Scheme issued by the Department of Expenditure, Ministry of Finance, India.

SunCon's shares settled 0.92% or two sen higher at RM2.19 on Tuesday, resulting in a market capitalisation of RM2.83 billion.