Court Says SHC Neglected Contract Dispute Resolution Procedures and Relevant Laws of WAPDA and NAB
The Federal Constitutional Court (FCC) on Monday set aside all orders of the Sindh High Court (SHC) relating to the Nai Gaj Dam project and restrained courts from intervening in its construction until its completion, ruling that further litigation should not delay a project of significant public importance.
The Nai Gaj Dam project in Dadu district of Sindh was launched in 2009 with an estimated cost of Rs 17 billion to support irrigation, water conservation and rehabilitate Manchar Lake.
The project has since faced repeated delays due to design changes, cost revisions, funding constraints and disputes between the federal and provincial governments over revised funding arrangements.
The bench, comprising Chief Justice Aminuddin Khan and Justice Ali Baqar Najafi, was hearing the petitions filed by the Water and Power Development Authority (WAPDA).
The 17-page judgment finds that disputes arising from the construction contract should be resolved through the mechanism agreed by the contracting parties rather than through judicial intervention.
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“The present case concerns a project of immense public importance undertaken with public funds for the purposes of irrigation, rehabilitation of Manchar Lake, agricultural development and water conservation,” the court observed.
If contractual rights are worth protecting, he adds, disputes must be resolved in a way that does not unnecessarily hinder the timely completion of critical public infrastructure.
The court held that the SHC had made its orders without properly considering the applicable legal framework, including the dispute resolution mechanism provided for in the contract and the relevant provisions of the WAPDA Act and the National Accountability Bureau laws.
It further observed that the jurisdiction of high courts under Article 199 of the Constitution could not be extended beyond constitutional limits, warning that such judicial overreach could result in miscarriage of justice.
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Granting the appeals, the FCC vacated the SHC’s judgment of May 27, 2025, as well as its orders of October 6, 2023 and June 13, 2025. The court also ruled on Constitutional Petition No. 64 of 2018 and all pending petitions.
The judgment orders WAPDA to rule within 15 days on any request presented by the contractor expressing its desire to resume and complete the project.
Such a request must be filed within one week of the judgment and include a commitment to complete the remaining work in accordance with the original contract, the arbitral award, the court decisions rendered on February 19 and July 31, 2021 and the memorandum of understanding signed on September 21, 2021.
The court further asked WAPDA to assess the scope of the remaining work and determine a reasonable extension of time, in accordance with the contractual provisions.
He added that if the contractor failed to honor its contractual obligations, WAPDA would be free to re-tend the remaining works in accordance with the law.
