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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
SOMASEKHAR SUNDARESAN
Hindustan Petroleum Corporation Limited – Appellant
Versus
G.R. Engineering Private Limited – Respondent
| Table of Content |
|---|
| 1. challenge to arbitral award on contractual disputes. (Para 1 , 2 , 3) |
| 2. claims for liquidated damages need to prove actual loss. (Para 4 , 29 , 30) |
| 3. criteria for withholding payment based on compliance with contract. (Para 6 , 7 , 8 , 9 , 10) |
| 4. no arbitrary decisions regarding contractual obligations require clarity. (Para 18 , 32 , 34) |
| 5. setting aside portions of the award and upholding legitimate claims. (Para 69 , 70) |
JUDGEMENT:
Context and Background:
1. This Petition under Section 34 of the Arbitration and Conciliation Act, 1996 (“the Act”) challenges an arbitral award dated May 2, 2018 (“Impugned Award”) passed in favour of the Respondent, G.R. Engineering Private Limited (“GRE”) by an arbitral tribunal allowing a claim against the Petitioner, Hindustan Petroleum Corporation Ltd. (“HPCL”).
2. HPCL invited bids and awarded GRE a contract to construct twelve “mounded bullets” to store liquified petroleum gas at HPCL’s refinery at Mahul (“Project”). Specific elements of the mounded bullets were to conform to the usage of reinforced cement concrete (“RCC”) of “M30 grade”. The Project was to be completed by December 5, 2007 but was completed on February 2, 2010. Di
Liquidated damages require proof of actual losses; insufficient reasoning in arbitral decisions can render findings arbitrary.
Arbitration Award - An Award however can be interfered with if it is found to be vulnerable under any of the grounds in Section 34 including being in contravention with the fundamental policy of Indi....
Liquidated damages must be genuinely reflective of actual loss; their retention without proof of damage is unjustified under relevant contract provisions.
The court affirmed the limited scope of review under Section 34 of the Arbitration and Conciliation Act, emphasizing respect for arbitral awards unless stark violations of public policy or procedural....
Arbitral tribunals have discretion over fact-finding, and courts should not re-evaluate evidence unless decisions violate public policy or involve patent illegality.
The court emphasized that for liquidated damages to be enforceable, the claimant must prove actual loss and the clause must represent a genuine pre-estimate of damages.
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