The main legal point established in the judgment is that the termination of a contract must comply with the notice period required by the contract, and the award of liquidated damages must be in accordance with the contract provisions and legal principles established by previous judgments.

By this petition filed under section 34 of the Arbitration and Conciliation Act, 1996 (for short the Arbitration Act), the petitioner has impugned part of the arbitral award dated 27th March,2014 insofar as claim for deduction of liquidated damages allowed by the learned arbitrator in favour of the respondent is concerned. Some of the relevant facts for the purpose of deciding this petition are as under :-

2. The petitioner was the original claimant whereas the respondent herein was the original respondent in the arbitral proceedings.

3. On or about 27th August, 2011 the respondent had invited tenders in respect of the subject work for developing a piece of land at Mangalore and constructing two towers of 24 storeys of flats for residential purpose to be offered to the public sale. The petitioner submitted their tender in response to the said notice. The respondent issued a work order on 13th March, 2012 in favour of the petitioner for the said work. The contract value was Rs.86,66,62,094.03. The time for completion of the said work was 21 calendar months from 10th day after letter of acceptance was issued i.e. during the period between 13th March, 2012 to 12th December, 2013. The work was to be commenced within 10 days from the date of the work order.

4. It was the case of the petitioner that though under clause 6 of the work order, it was provided that the site for Atlantic and Pacific buildings would be handed over to the petitioner immediately, the site for Atlantic building was handed over only on 8th April, 2012 whereas the site for Pacific building was handed over on 16th May, 2012. On 13th April, 2012, the petitioner informed that Form 5 was not issued by the respondent.

5. On 2nd May, 2012, the respondent agreed that the petitioner had commenced mobilization immediately on issue of the letter of acceptance with adequate site staff, equipments and machinery. It is the case of the petitioner that there was loss of 21 days on account of non-supply of ready mixer concrete by the vendors approved by the respondent and also on account of delay in handing over the site of Pacific and Atlantic Towers. Several correspondence was exchanged between the parties alleging delay on the part of each other.

6. It was the case of the petitioner that there was delay on the part of the respondent in issuance of drawing and in making legitimate payments to the petitioner. On 27th December, 2012, the respondent issued a termination order stating that the work would stand terminated on 11th January, 2013 and that the petitioner should vacate the project removing all men/workers deployed/deputed, failing which the respondent would resort to its right to remove them at risk and cost and consequences of the petitioner. On 31st December, 2012 the respondent encashed the bank guarantee of Rs.7,95,51,153/-.

7. By letter dated 28th December, 2012, addressed by the petitioner, the petitioner informed the respondent that it was ready to continue and complete the work within another 12 months plus extension of time which the petitioner was legitimately entitled to as per contract considering the delays caused by the respondent and those beyond control of the petitioner.

8. On 16th January, 2013, the respondent took steps for confiscating petitioner's machinery, tools and plants of the petitioner. The petitioner informed the respondent by their letter dated 16th January, 2013 that it had taken measurement of the work done and that part A of 8th and final bill was being submitted as contract was being terminated by the respondent and reserved its right to furnish other claims as part B consequent to the illegal termination of the contract by the respondent. Parties thereafter appointed the learned arbitrator who issued directions to both parties to file their pleadings and documents. Pursuant to the liberty granted by the learned arbitrator, the petitioner submitted its statement of claim on 25th January, 2013 and made eight claims before the learne