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Infrastructure & PPP · 18 September 2026

Karnataka High Court Sets Aside Rs 13.08 Crore of L&T's Metro Arbitral Award for Disregarding Evidence

Source: Originally reported by LiveLaw Biz and supremetoday.ai. This article has been independently researched and rewritten in full by S&S Co. Advocates & Solicitors for informational purposes: it is not a reproduction of the original reports. Readers are encouraged to consult the original sources and the underlying judgement directly.

Metro rail construction contracts generate claims over every conceivable line item, from the quantity of parapet concrete actually poured to the rate payable for reinforcement work at specific pier locations, and an arbitral tribunal asked to rule on dozens of such claims across a multi-hundred-crore contract can get individual computations wrong even while getting the broad entitlement right. The Karnataka High Court's ruling on 18 September 2026, partly setting aside an award in favour of Larsen & Toubro against the Bangalore Metro Rail Corporation, turns on exactly that kind of computational error.

The underlying contract, valued at roughly ₹303.29 crore, covered construction work on the Bengaluru Metro network. L&T's claims against BMRCL, pursued in arbitration, succeeded on several fronts, and the tribunal's award in the contractor's favour reached approximately ₹13.08 crore once all the contested items were totalled. BMRCL challenged that award under Section 34 of the Arbitration and Conciliation Act before the Karnataka High Court, which found enough wrong with specific components of the award to set those components aside while leaving the rest of the arbitral outcome untouched.

Three distinct claims fell to BMRCL's challenge. The tribunal's treatment of reduced parapet quantities did not survive scrutiny, nor did its award on revised rates for work at eighteen pier locations, nor its allowance for unpaid reinforcement work. The Division Bench, led by Chief Justice Vibhu Bakhru sitting with Justice K.S. Hemalekha, also set aside the tribunal's finding that L&T was entitled to time-related costs arising from the project's delays, a finding that would have added a further layer of compensation on top of the specific item-level claims.

The parapet claim illustrates the kind of mismatch that drove the Bench's reasoning across all three heads. L&T had claimed ₹4.23 crore for the parapet work in question, and the tribunal, rather than accepting that figure or rejecting it outright, arrived at an intermediate award of ₹96.43 lakh. The High Court held that this intermediate figure corresponded to neither L&T's own claim nor to what the evidentiary record actually supported, leaving the tribunal's computation untethered from any evidentiary basis a reviewing court could trace. An arbitrator is entitled to split the difference between competing figures where the evidence genuinely supports a middle path, but is not entitled to produce a number that matches nothing in the record at all.

A familiar standard in Section 34 jurisprudence is what the Bench applied here, restated with some precision. A court reviewing an arbitral award does not re-weigh the evidence or substitute its own view of disputed facts for the tribunal's; that much is settled and the Bench did not depart from it. What a court can do, and what the Bench held it was doing here, is set aside an award where the tribunal demonstrably disregarded material actually on the record, since an award built on a computation that tracks neither party's case does not reflect a reasoned engagement with the evidence at all, whatever deference the tribunal's findings would otherwise receive.

For infrastructure contractors and public sector corporations litigating construction arbitrations generally, the ruling is a reminder that an award's overall direction surviving judicial review is no guarantee that every individual claim within it will survive as well. BMRCL did not attempt to overturn the entire award, and did not succeed in doing so; it instead picked out specific claims where the tribunal's arithmetic could be shown to float free of the record, and won on those narrower grounds while leaving the balance of the award, including whatever claims the tribunal decided correctly, undisturbed.

The case follows an earlier, separate round between the same parties in which a different bench had already rejected a distinct L&T claim for roughly ₹29 crore in delay compensation, reasoning that the contract allowed extra time only for delays BMRCL itself had caused. Taken together, the two rulings suggest a pattern of close judicial scrutiny of individual claims within this particular metro contract's arbitration, rather than a wholesale endorsement or rejection of either party's broader position on who bore responsibility for the project's difficulties.

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