The Brihanmumbai Municipal Corporation will pay more than Rs 65 crore over a sewage operations and maintenance consultancy contract originally valued at Rs 14 crore after the Supreme Court dismissed its challenge to an arbitration award, ending litigation that continued across multiple judicial levels.
The BMC’s standing committee approved the payment on Tuesday after the civic administration warned that its accounts could be frozen if the award was not honoured. The decision drew criticism from members of both the ruling party and the Opposition, who questioned why the dispute had been pursued for years and why the resulting financial burden would fall on the civic body.
Standing committee chairperson Prabhakar Shinde sought a comprehensive inquiry into the matter, action against officials responsible and a report within 15 days. He said the proposal had been brought before the committee only four days earlier and described the circumstances as an example of the committee being forced to take a decision “at gunpoint”.
The contract was awarded in 1995 to Canada-based R V Anderson Associates Ltd, with PHE Consultants as its local partner. It covered a study of the functioning and maintenance of Mumbai’s sewage disposal operations, including facilities already in operation, under construction and planned for the following 10 years. The 74-month contract was completed in June 2001.
According to the BMC, there was no dispute over the quality of the work. The firms, however, claimed that payments were pending, incomplete or delayed and initiated arbitration proceedings, also seeking interest and costs.
A three-member arbitration tribunal ruled in favour of the firms in June 2010. It directed the BMC to pay US$2,078,349.25 and Rs 14,76,736, along with interest at 14% per annum on US$1,089,926.88 and Rs 1,51,596 from June 2004. The award also included fixed arbitration costs of Singapore dollars 55,217 and Rs 15,57,500, as well as arbitration expenses of Singapore dollars 42,815 and Rs 3,87,500.
The BMC challenged the award before the Bombay High Court in November 2011. A single bench of Justice GS Patel dismissed the petition and upheld the award. Orders passed in October 2022 were published on the High Court’s website in August 2023. The BMC later challenged that decision, but a two-judge bench dismissed the petition in July 2025.
The civic body then approached the Supreme Court in August 2025. The court dismissed its petition, and a review petition filed in April 2026 was also dismissed, leaving the BMC liable for the payment approved by the standing committee.
Shiv Sena (UBT) member Yashodhar Phanse sought details of the legal department officials who supported continuing the litigation before the High Court and Supreme Court and called for action against those responsible. Congress group leader Ashraf Azmi demanded an inquiry into the “avoidable” financial burden and asked the municipal commissioner to submit a consolidated statement of significant monetary claims pending against the BMC before courts, tribunals and other judicial or quasi-judicial forums.
The standing committee has sought the inquiry report within 15 days. The municipal commissioner’s proposed statement on pending claims is expected to indicate the wider exposure of the civic body to unresolved contractual and legal liabilities.
