In a recent ruling by the Delhi High Court, a significant decision was made regarding the Hydro Electric Power case. The court addressed the claims and interests presented by the parties involved, shedding light on the legal aspects of contract termination and compensation. This judgement could have far-reaching impacts on similar cases in the future. Stay tuned for more insights!
Facts
- The petitioner is a Government of India enterprise focused on developing Hydro Electric Power
- The Sole Arbitrator granted the respondent’s claims amounting to Rs. 40,99,000
- The applicable law mentioned in the contract is Indian Law
Issue
- Place of performance and jurisdiction is the Registered Office of the Employer in Faridabad.
- The arbitration clause in the tender document/contract is not applicable for any issue/dispute under Integrity Pact.
- The learned Arbitrator allowed the claim of Rs. 99,000 for loss of fee of N.I.T. Hamirpur and loss of profit of the execution of the work under contract amounting to Rs. 40,00,000.
Decision
- The petitioner is liable to pay interest at the rate of 10% if the amount is not paid within 10 days.
- If the petitioner pays Rs. 40,99,000 within 10 days, no interest will be charged.
- The Arbitral Award dated 30.11.2023 is set aside only to the extent of the interest awarded.
- The respondent must pay Rs. 40,99,000 to the Claimant with 10% interest from the date of reference to the arbitral tribunal.
- The petitioner’s termination of the contract was deemed wrongful, leading to a loss of profit for the Claimant.
- The Arbitrator relied on legal precedent and CPWD’s Office Memorandum to determine 15% of the contract amount as reasonable compensation for the illegal contract termination.
Case Title: NHPC LTD Vs. APAAR INFRATECH PVT LTD (2024:DHC:4104)
Case Number: O.M.P. (COMM)-219/2024
