DIPANKAR DATTA, S. RAVINDRA BHAT, JJ
M/S UNIBROS – Appellant
Versus
ALL INDIA RADIO – Respondent
In the context of claims for loss of profit due to delays in contract performance, such as the issue of idle charges, the legal principles outlined in the provided document emphasize the importance of credible and sufficient evidence to substantiate such claims (!) (!) . Specifically, the claimant must demonstrate that the delay caused by the respondent resulted in the contractor being unable to undertake other profitable work opportunities with their existing resources.
The courts have clarified that mere assertions or estimations are inadequate; instead, the claimant must produce concrete evidence—such as details of other potential projects, tender opportunities declined, or financial statements—that convincingly establish the existence of viable alternative profits that were foregone due to the delay (!) .
Furthermore, the use of formulas like Hudson’s may aid in estimating damages, but they cannot substitute for actual evidence of loss. The application of such formulas requires that the claimant first substantiate that the loss of profit was real and measurable, and not merely speculative (!) (!) .
In summary, for claims related to idle charges or loss of profit due to contract delays, the claimant must provide credible, tangible evidence demonstrating that the delay directly caused the loss of specific, identifiable profit opportunities. Without such evidence, claims for idle charges are unlikely to be upheld, and awards based solely on estimations or formulas without proper evidentiary support may be considered contrary to public policy and legally unsustainable (!) (!) .
| Table of Content |
|---|
| 1. claim for loss due to delay in contract performance. (Para 3) |
| 2. arguments regarding evidence supporting profit claims. (Para 5) |
| 3. court's observations on public policy and evidence requirements. (Para 7 , 8 , 10 , 11 , 14) |
| 4. requirement for credible evidence in profit loss claims. (Para 20) |
| 5. final dismissal due to lack of substantiation. (Para 21) |
JUDGEMENT
DIPANKAR DATTA, J.
1. Leave granted.
2. This appeal, at the instance of M/s Unibros (“appellant”, hereafter), registers a challenge to the judgment and order dated 9th December, 2019 in FAO (OS) 229/2010 passed by the High Court of Delhi (“High Court”, hereafter) dismissing an appeal carried by the appellant under section 37 of the Arbitration and Conciliation Act, 1996 (“the Act”, hereafter). Vide the impugned judgment, a Division Bench affirmed the judgment and order of a learned Single Judge dated 25th February, 2010 whereby an objection of the All India Radio (“respondent”, hereafter) under section 34 of the Act was allowed resulting in setting aside of an arbitral Award dated 15th July, 2002 to the extent it awarded loss of profit to the appellant.
3. The relevant facts, discerned from the records, rev
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