Supreme Court of India Sets Aside Arbitral Award in National Highway Land Compensation Dispute
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TL;DR
- Supreme Court of India set aside an arbitral award that enhanced land compensation for Alfa Remidis Ltd.
- The dispute concerned compensation for land acquired for National Highway No. 547-E.
- The Court found the arbitrator erred by adopting a single sale deed for valuation, contrary to Section 26(1) of the 2013 Land Acquisition Act.
- The High Court's restoration of the award was overturned on statutory grounds.
Overview
On 12 May 2026, the Supreme Court of India ruled on a compensation dispute over land acquired for the widening of National Highway No. 547-E. The National Highways Authority of India (NHAI) challenged an arbitral award that had increased the compensation payable to landowner Alfa Remidis Ltd. The Supreme Court found that both the calculation method and evidence used in the arbitral award did not comply with the statutory requirements under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
What Happened
Alfa Remidis Ltd. owned 1,394 square meters of land in Nagpur District, which was acquired for the expansion of National Highway No. 547-E.
The original compensation determined by the Deputy Collector categorized the land as agricultural and used three agricultural land sale deeds to value it.
Alfa Remidis Ltd. challenged this categorization, asserting the land was used for industrial purposes, and cited a higher government rate and a single residential sale deed for valuation at arbitration.
The arbitrator issued an award granting compensation at the higher rate based on the single residential sale deed.
NHAI and the Government of India applied to set aside the award, claiming that the methodology was contrary to Section 26(1) of the 2013 Act, which requires using average sale prices from multiple sale deeds for similar types of land.
A district judge agreed and set aside the award, but the High Court reversed that decision, reinstating the arbitral award.
The Supreme Court found that the arbitrator's use of a non-comparable single sale deed did not comply with statutory requirements, and restored the district judge's decision to set aside the award.
Context
Under the National Highways Act, land acquisition requires compensation calculated in accordance with the 2013 Land Acquisition Act. Section 26(1)(b) of that Act mandates using the average sale price from multiple sale deeds for similar land types in the area. The Supreme Court noted previous precedent that singular sale deeds are insufficient for such determinations.
Why It Matters
- The judgment clarifies the methodology for valuing land acquired for public purposes in India, reinforcing that compensation must be based on statutory criteria and comparable sales data. It also affirms the limits of judicial review of arbitral awards under Section 34 of the Arbitration and Conciliation Act when statutory compliance is at issue.