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IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
R RAGHUNANDAN RAO, T.C.D. SEKHAR, JJ.
M/s. Sunrise & Engineering Industries - Appellant
Versus
Hindustan Shipyard Limited – Respondent
C.M.A.NOS.234, 242, 243, 244, 245, 246, 247, 248, 249, 253, 257, 258, 259 of 2025, Civil Miscellaneous Appeal No: 234 of 2025
Decided On : 31-12-2025
JUDGMENT :
R. Raghunandan Rao, J.
As all these appeals raise the same issues and arise out of awards passed by the same Arbitrator, they are being disposed of, by way of this common judgment.
2. Respondent No.1 in all these cases is a Public Sector Undertaking, involved in the construction, fabrication and repairs of various kinds of vessels and other works. The 1st respondent had awarded sub-contracts to various sub-contractors for the aforesaid works. These contracts were awarded under separate work orders. All these work orders contained timelines within which the work was to be completed. In the event of failure to adhere to the timeline, all the contracts provided for liquidated damages to be levied @ 2% per week of delay up to a maximum of 20% of the contract value. The 1st respondent, on the ground that there was delay in all the aforesaid contracts, awarded to the appellants herein, had levied liquidated damages of 20% of the contract value and deducted the same in the bills of the appellants. Aggrieved by the said deduction of liquidated damages, the appellants sought reference to arbitration. A common arbitrator was appointed in all these cases.
3. The details of the claims made by the appellants and the awards passed by the learned Arbitrator are contained in the table set out below:
| S.No | Name of the Petitioner | Arbitration case number and Date of Arbitral Award | Arbitration OP NO and date of order | CMA NO |
|---|---|---|---|---|
| 1 | Sun rise and engineering industries | 001 of 2013 05/11/2016 | ARB OP 257 of 2017 03/01/2025 | 234 of 2025 |
| 2 | Swapna fabrics and constructions | 003 of 2013 05/11/2016 | ARB OP 2261 of 2017 03/01/2025 | 242 of 2025 |
| 3 | Sri Srinivasa engineering Works | 013 of 2013 05/11/2016 | ARB OP 266 of 2017 03/01/2025 | 243 of 2025 |
| 4 | Nest builders and engineers | 012 of 2013 05/11/2016 | ARB OP 259 of 2017 03/01/2025 | 244 of 2025 |
| 5 | Nest builders and engineers | 007 of 2013 05/11/2016 | ARB OP 264 of 2017 03/01/2025 | 245 of 2025 |
| 6 | Bharat steel fabrication works | 015 of 2013 05/11/2016 | ARB OP 256 of 2017 03/01/2025 | 246 of 2025 |
| 7 | Sri Srinivasa engineering Works | 014 of 2013 05/11/2016 | ARB OP 255 of 2017 03/01/2025 | 247 of 2025 |
| 8 | Swapna fabrics and constructions | 010 of 2013 05/11/2016 | ARB OP 262 of 2017 03/01/2025 | 248 of 2025 |
| 9 | Bharat steel fabrication works | 008 of 2013 05/11/2016 | ARB OP 254 of 2017 03/01/2025 | 249 of 2025 |
| 10 | Perfect People | 009 of 2013 05/11/2016 | ARB OP 263 of 2017 03/01/2025 | 253 of 2025 |
| 11 | KIM Fabs | 004 of 2013 05/11/2016 | ARB OP 265 of 2017 03/01/2025 | 257 of 2025 |
| 12 | Patel Engineering Works | 006 of 2013 05/11/2016 | ARB OP 258 of 2017 03/01/2025 | 258 of 2025 |
| 13 | Sunrise Engineering Industries | 005 of 2013 05/11/2016 | ARB OP 260 of 2017 03/01/2025 | 259 of 2025 |
4. In all these claims, the case of the claimants can be placed under three heads.
i) The delay in the execution of the works entrusted to the appellants, were on account of the inaction as well as actions of the respondent herein including delay in providing clear facilities at ground level for works to be carried on, unrealistic work schedules, insufficient work area, not providing crane facility in needed times, delay in supply of consumables and processed elements, delay in clearing inter dependencies, delayed payments for completed works etc. The claimants contended that all these issues were brought to the notice of the respondents on a number of occasions and in relation to each of the works in particular. Thus, the delay in adherence to time schedule was not on account of claimants but only on account of the respondent.
ii) Similarly constituted contractors who had been awarded similar works had not been levied with liquidated damages and in some cases, revised schedules were also given with liquidated damage being reduced to 0.5% per week of delay subject to a maximum of 5% of the tender value.
iii) The quantum of liquidated damages @ 2% per week of delay subject to a maximum of 20% of the work is exorbitant, unconscionable, arbitrary, unjust, oppressive, illegal and unenforceable. This arbitrary conduct is further made out as similar works awarded by the respondent contained clause stipulating
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