The main legal point established in the judgment is that where a party is liable for breach of contract, the plaintiff is entitled to claim damages for loss of profit which he expected to earn by undertaking the works contract. The court also emphasized the entitlement of the respondent to claim additional cost/compensation for the extended period of time for completing the work beyond the stipulated date.

1. This petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) has been filed by the petitioner challenging the Arbitral Award dated 14.08.2017 passed by the Arbitral Tribunal. The challenge is confined to the grant of claim no. 1 and claim no. 3.

2. As far as claim no. 1 is concerned, it is submitted by the learned Additional Solicitor General (hereinafter referred to as the ‘ASG’) that the Engineer while recommending the grant of extension of time for completion of work, had opined that the slow rate of progress achieved was due to respondent’s own inefficiency, poor standard of equipments and weak project management. It was further recommended that the respondent is not entitled to any additional financial compensation or costs as the respondent’s plant and equipment had never been idle as areas were also available for the respondent to work. It is submitted that in terms of Clause 44.2 of the Conditions of Contract, it was the Engineer who was to decide whether and by how much the contract price is to be increased due to ‘Compensation Events’ and whether and by how much the ‘Intended Completion Date’ is to be extended; the Engineer having recommended that the respondent is not entitled to any increase in the contract price, the Arbitral Tribunal has erred in granting the same under claim no. 1 in favour of the respondent.

3. It is further contended by the learned ASG that in any case, the Arbitral Tribunal having awarded additional costs on account of Site and H.O. Overheads due to delay in completion of project in favour of the respondent, further amount on account of loss suffered due to lost opportunity to earn profit out of resources owing to delay in completion of works could not have been granted in favour of the respondent by the Arbitral Tribunal.

4. It is further submitted by the learned ASG that the Minority Award has rejected such claim, in her submissions rightly so, on the ground that Clause 44.1 of the Conditions of Contract indicates that there can be a possibility that the project can get extended due to various ‘Compensation Events’ listed in the said Clause; the Claimant/Respondent herein having quoted for the work knowing fully well that there is a provision in the Contract by which extension of Contract period was a possibility, cannot claim loss of profit due to such extension. The Minority Award further held that there was no evidence led by the respondent to prove that the loss suffered by it was due to extension of time for completion of work and respondent’s reliance on the NH 24 tender in this regard cannot be sustained. The learned ASG submits that the Minority Award takes the correct view on the dispute and should be accepted by this Court while setting aside the Award passed by the Majority.

5. As far as claim no. 3 is concerned, the same relates to award of interest at the rate of 12% per annum with effect from 10.12.2009. Relying upon Clause 43.1 of the Conditions of Contract, the learned ASG submits that the award of interest for the date prior to the Award, could not have been granted by the Arbitral Tribunal. It is submitted that it is only with the passing of the Award that the amounts awarded in the Impugned Award would get certified and, therefore, no interest can be awarded from the date prior to such certification.

6. I have considered the submissions made by the learned ASG on behalf of the petitioner. As far as the cause of delay in execution of the work is concerned, I may only note that the stipulated date of completion of work was 29.12.2003, while the actual date of completion of work was 29.02.2008 i.e. almost more than four years after the stipulated date. The Arbitral Tribunal in its Award passed by the Majority (on this aspect there is no dissent by the Minority in the Arbitral Award) has held that in the letters recommending extension of time by the Engineer, various causes of delay as ‘Compensation Events’, not a