Whether Arbitrator can allow damages for delay in completion of project when parties have agreed otherwise in the agreement?

-



SHUBHAM BUDHIRAJA[1]

 

A and B enter into a contract whereby A agreed to complete the project within the timeline, the parties also agreed on a clause that in case there is any delay in completion then other party will not be entitled to any damages. A delayed in completing the project by 3 years. The arbitral tribunal awarded in favor of B including the claim of damages for delay. The Delhi High Court confirmed the arbitrator reasoning that the said clause would not be applicable where the delay is unreasonable and of a long duration. This exclusionary clause would not preclude the B from raising a claim for compensation. The ‘Business Efficacy Test’ is required to be applied while considering the exclusionary clause[2].

 

(I)                 It is well settled that the question as to interpretation of a clause of a contract falls within the jurisdiction of an arbitral tribunal. The decision of the arbitral tribunal cannot be interfered with unless the same is found to be patently illegal or in conflict with the Public Policy of India.

 

(II)               The contention that the impugned award is vitiated by patent illegality as it is based on no evidence is also unmerited. It is necessary to bear in mind that the Indian Evidence Act, 1872 and the strict rules of evidence are inapplicable to arbitral proceedings. The Arbitral Tribunal is required to render a decision after evaluating the material placed before it.

 

(III)             The Arbitral Tribunal had accepted the CA Certificate. Although, he was not examined, the concerned officer had produced the said Certificate and duly affirmed the quantification. The strict rules of evidence do not apply to arbitral proceedings and there is considerable discretion available with the Arbitral Tribunal to take a view on the quality and the sufficiency of evidence.


[1] (ACS, LLB, BCOM (H))

Shubhambudhiraja02@gmail.com

[2] O.M.P. (COMM) 273/2021

Comments

Post a Comment

Popular posts from this blog

Whether a person can be appointed as an arbitrator if his daughter is married to the son of the eldest brother of one of the parties in the arbitration proceedings?

-
Image
    Shubham Budhiraja [1] Two brothers running a family business in the form of a company and dispute arise between them and both decide to resolve through arbitration. During course of arbitration proceedings, one of party filed Section 14(2) r/w Section 15 Petition filed challenging mandate of arbitrator as being terminated because son of arbitrator is married to daughter of eldest brother of one of party and thus should be disqualified under Section 12(5) being ‘close family relationship’. The Hon’ble Delhi High Court declined the relief and held that neither the Seventh Schedule of the A&C Act nor the IBA Guidelines define the expression ‘close family relationship’. The plain language of Entry no. 9 indicates that it is not the legislative intent to render a distant relative of the parties to be ineligible for being appointed as an arbitrator, if both the parties so agree. It is not sufficient that the arbitrator is related to any one of the parties; the relationship must
Read more

ELECTRONIC EVIDENCE: THE UNFERTILE CROP

-
Image
ELECTRONIC EVIDENCE: THE UNFERTILE CROP SHUBHAM BUDHIRAJA [1] Digital images are no different from the droplets of rain that fall, merge, and then divide: there is no telling whether the droplets that split are identical to the droplets that came together to form the larger droplet [2] . INTRODUCTION Law may be divided into substantive and procedural laws. The laws by which rights, duties and liabilities are defined are called substantive law whereas laws which prescribe mode by which application of substantive law is regulated are called procedural law. Law of Evidence is a judicial recognition to the system of logical reasoning. The Indian Evidence act, 1872 is a bunch of 167 sections divided into 11 chapters and 3 parts. Part II, Chapter V is headed as “of Documentary Evidence” is of relevance for our discussion in this article. At the threshold, it is submitted that the proving of oral evidence are in contrast to the proving of documentary
Read more

REPUGANCY UNDER ARTICLE 254 & TEST OF VALIDATING LAW

-
Image
  Shubham Budhiraja [1] [1] Company Secretary, LLB Final Year,DU & Bcom (H) The land acquisition falls in concurrent list and parliament in year 2013 has introduced a new act which provides for rehabilitation, compensation and procedure on land acquisition of property. The State of T.N has made 3 different state laws w.r.t. land acquisition which was struck off by the High Court. Thereafter, state of TN in year 2019 enacted the same law but with president assent under Article 254 to avoid the repugnancy with 2013 act under Article 254. The appeal filed before apex court w.r.t. repugnancy of 2019 state law with 2013 central law & test of validating the struck off law. The Supreme Court observed as: VALIDATING A LAW WITH RETROSPECTIVE EFFECT Case Law Relevant Remarks National  Agricultural  Cooperative  Marketing  Federation  of India Ltd. & Anr. vs. Union of India & Ors, (2003) 5 SCC 23 The legislati
Read more