OLMT compensation dispute: LHC dismisses LDA's plea against civil court order

LAHORE: The Lahore High Court (LHC) has upheld the civil court’s order for arbitration in Orange Line Metro Train (OLMT) compensation dispute and dismissed the appeal of the Lahore Development Authority (LHC) against the verdict, ARY News reported on Thursday.

The Lahore Development Authority (LDA) had challenged the civil court’s order for allowing arbitration in compensation dispute between the authority and the contractor for demanding additional compensatory payments following a delay in the Orange Line Metro Train (OLMT) project due to litigation.

A private construction company had demanded the payment of additional compensation worth Rs1.98 billion after a delay of 22 months and 11 days in the execution of the OLMT project.

The civil court gave the verdict in favour of the contractor and issued directives to resolve the dispute by filing an arbitration agreement between the parties besides appointing an arbitrator

Later, the LDA challenged the order by arguing that there was no violation of the agreement as the delay was caused due to litigation. The LDA said that there was no dispute between the parties, hence, the civil court’s order to resolve the matter through arbitration was illegal.

Justice Abid Hussain of the Lahore High Court remarked that the controversies have clearly stipulated the existence of a dispute between the parties in accordance with the records. The existence of a dispute could not be ruled out on the basis of LDA’s argument.

He observed that the matter shall be referred to the arbitrator to ascertain whether the contractor’s demand for additional compensatory payment was legal or not.

Dismissing the LDA’s appeal, Justice Abid Hussain upheld the civil court’s order for arbitration on a dispute regarding compensation payments demanded by the contractor for a delay in the execution of the OLMT project.