NaiGaj Dam project: No court intervention until dispute mechanism is exhausted: FCC

ISLAMABAD: To ensure uninterrupted execution of the NaiGaj Dam project, the Federal Constitutional Court (FCC) ruled that no judicial proceedings or intervention by any court would be permissible until completion of the dam, except in accordance with the dispute resolution mechanism contained in the original contract. NaiGaj Dam project in Sindh’s Dadu district was launched in 2009 with an estimated cost of Rs17 billion to support irrigation, conserve water and rehabilitate Manchar Lake. The project has since faced repeated delays due to design changes, cost revisions, funding constraints, and disputes over revised financing arrangements. The FCC bench, comprising Chief Justice Aminud Din Khan and Justice Ali Baqar Najafi, heard the petitions of the Water and Power Development Authority (WAPDA). The bench set aside the Sindh High Court (SHC) impugned judgment dated 27. 05. 2025 and impugned orders dated 06. 10. 2023 and 13. 06. 2025. WAPDA was directed to consider and decide, within fifteen days of the receipt of any request made by the contractor, provided such request is submitted within one week of the receipt of this judgment, expressing its unequivocal willingness to resume and complete the project strictly in accordance with the original Contract Agreement, the arbitral Award, the decrees dated 19-02-2021 and 31-07-2021, and the Memorandum of Understanding (MoU) dated 21-09-2021. The judgment, authored by Justice Amin ud Din, said that while deciding such a request, WAPDA shall assess the nature and extent of the remaining works and determine a reasonable extension of time strictly in terms of the contractual provisions governing extension of the construction period. It, however, made unequivocally clear that the grant of any such extension shall not confer upon the contractor any entitlement to any further escalation of the contract price, additional compensation, or any other financial benefit whatsoever beyond that already crystallized and finally determined under the arbitral Award, the decrees of the competent Court, and the MoU. Conversely, if the contractor fails to submit such a request within the stipulated period or declines to execute the remaining works strictly in accordance with the Contract, arbitral Award, decrees, and MoU, WAPDA shall be at liberty to re-tender the remaining works on a risk-and-cost basis in accordance with law and the terms of the Contract. The Court noted that the arbitral award was made in accordance with the Rules of the Court and the decree passed (by the SHC) in terms thereof; and the MoU executed for its implementation must be respected and enforced in accordance with law. Any departure there from can only be justified upon establishing grounds recognized under the Arbitration Act, 1940, or other applicable law, and not merely based on a subsequent claim seeking contractual advantages inconsistent with the settlement already accepted by the parties. The judgment noted that the jurisdiction exercised by the High Court under Article 199 of the Constitution is undoubtedly wide; however, it cannot ordinarily be invoked to alter, vary or rewrite rights which have already been conclusively determined by a decree passed by the same Court in exercise of its statutory jurisdiction under section 17 of the Act. To hold otherwise would permit the exercise of constitutional jurisdiction in a manner inconsistent with the principle of finality attaching to judicial determinations and would render the statutory framework governing arbitration nugatory. The judgment said that the High Court also gravely erred in assuming jurisdiction over the inquiry initiated by the National Accountability Bureau (NAB) regarding the alleged submission of a forged bank guarantee. The impugned judgment further suffers from the fundamental infirmity of being a non-speaking and unreasoned order. The conclusions recorded in the impugned judgment are unsupported by any analytical discussion of the pleadings, evidence, or applicable law, noted the FCC. Copyright Business Recorder, 2026

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