Acceptance of delayed performance without complaint waives claims for breach; contemporaneous allegations are required to support contract termination.

SANDEEP V. MARNE, J.

1) The Petition seeks to challenge Award of the Arbitral Tribunal dated 8 April 2024 under Section 34 of the Arbitration and Conciliation Act, 1996 (Arbitration Act). By the impugned Award, the learned sole Arbitrator has dismissed all claims raised by the Petitioner and has awarded costs of Rs.59,85,733.75/- in favour of the Respondent.

2) Petitioner, which was formerly known as Aristo Realty Developers Ltd., is a company incorporated under the Companies Act and engaged in the business of real estate and construction. Petitioner owned Plot No.B, CTS No.1498, A/3 situated off M.V. road, Chimatpada, Marol, Andheri (East), Mumbai- 400056. It was desirous of constructing five star quality hotel/service apartments on the said plot. Respondent is a company incorporated in Labuan and registered in Republic of Singapore. Respondent is engaged in the business of planning, designing, decorating, furnishing and equipping, promoting, managing and operating hotels around the globe. For the purpose of setting up five star quality hotel/service apartments on its plot, Petitioner decided to procure services of the Respondent and executed a Letter of Intent (LOI) dated 4 September 2007 to record the intent of the Respondent or its affiliates entering into Management Agreement, Offshore Technical Service and Marketing Agreement and Trademark License Agreement with the Petitioner. According to the Respondent, till execution of formal agreements, the rights and obligations between the parties were governed by the terms of LOI. The LOI was subsequently amended on 25 September 2009 to reflect change in the number of units contemplated. The parties later executed the three agreements on 21 March 2013. The Management Agreement was executed between the Petitioner and Oakwood Management Services India Pvt. Ltd. Offshore Technical Services and Marketing Agreement (OTSMA) was executed between the Petitioner and Respondent. A separate Trademark License Agreement was also executed between the Petitioner and the Respondent. According to the Petitioner, Respondent commenced providing technical services to the Petitioner from March/April 2008 in absence of formalised contract. Petitioner claims to have raised loans aggregating INR 120 crores from various banks in anticipation of commencement of hotel business.

3) Subsequent to execution of OTSMA, FSI available on the plots stood revised and the number of units proposed in the hotel were reduced from 199 to 165 units. Petitioner submitted plans and designs of the proposed hotel to the Respondent, who made suggestions and modifications in the designs from time to time. According to the Petitioner, due to deficiency and non-provision of services, the proposed hotel could not come up and only a super structure sans top floor was erected on the plot. In January 2016, Petitioner and Respondent engaged in discussions for selling the unfinished hotel to MapleTree, which transaction could not fructify. According to the Petitioner, it arranged to sell the unfinished hotel to MASA Hotels Private Limited (MASA) in September/October 2016 and out of agreed consideration of Rs. 265 crore, MASA paid only Rs.195 crores citing the reason of engagement of the Respondent in setting up of the hotel. In the above background, Petitioner terminated the Management Agreement executed with Oakwood Management Services India Pvt. Ltd. on 20th March 2017. By a separate letter dated 20th March 2017, OTSMA as well as Trademarks Agreement were also terminated stating that they were co-terminus with the Management Agreement. By letter dated 27 March 2017, Respondents sought liquidated damages