Latest news with #GeneralConditionsofContract
Indian Express
24-05-2025
- Business
- Indian Express
Karnataka High Court rejects L&T's Rs 28.74-crore claim against BMRCL in Metro delay dispute
The Karnataka High Court, in a ruling on May 20, dismissed an appeal by Larsen and Toubro Limited (L&T) against the Bengaluru Metro Rail Corporation Limited (BMRCL), upholding a lower court's decision to nullify an arbitral award of Rs 28.74 crore for losses incurred due to project delays. The judgment was delivered by Justices V Kameswar Rao and S Rachaiah. 'The Tribunal's award of Rs 28.74 crore, ignoring Clauses 2.2 and 8.3, is a jurisdictional error. An arbitrator, bound by the contract, cannot override its express terms, especially when L&T accepted extensions without reserving compensation rights, rendering the award contrary to public policy,' they noted. The case traces back to a December 2009 contract, wherein L&T was tasked with building three elevated Metro stations—Yeshwanthpur, Soap Factory, and Mahalaxmi—for Bengaluru's Metro system. The 22-month project, governed by General Conditions of Contract (GCC), stipulated that delays caused by BMRCL would warrant only extensions of time (EOTs), not monetary compensation, as per Clauses 2.2 and 8.3. Delays emerged due to land acquisition disputes, resolved by May 2012, leading BMRCL to grant five EOTs without liquidated damages but explicitly prohibiting compensation claims. Seeking redress for alleged losses, L&T pursued arbitration. In 2018, the Arbitral Tribunal awarded L&T Rs 28.74 crore, referencing the Supreme Court's General Manager, Northern Railways v. Sarvesh Chopra (2002), which suggested contractors could claim compensation if they notified the employer during EOT acceptance. The Tribunal deemed L&T's communications sufficient to override the contract's no-compensation clauses. BMRCL challenged this under Section 34 of the Arbitration and Conciliation Act, 1996, before Bengaluru's Additional City Civil and Sessions Judge, who, in October 2022, overturned the award, citing its violation of the contract and the Tribunal's overreach. L&T appealed to the High Court, arguing that Clauses 2.2 and 8.3 were void under the Indian Contract Act, 1872, for being against public policy, and that the Sessions Judge improperly re-assessed evidence. Citing Sarvesh Chopra and precedents like ONGC v. Wig Brothers (2010), L&T claimed BMRCL's delays amounted to a fundamental breach. BMRCL countered that the Tribunal disregarded the contract and authoritative rulings, including Wig Brothers and Ramnath International (2007), which uphold no-compensation clauses. They argued L&T's EOT applications lacked explicit intent to claim compensation, failing Sarvesh Chopra's notice requirement. The High Court ruled in BMRCL's favour, finding that L&T's acceptance of EOTs without reserving compensation rights precluded later claims. The Court clarified that Sarvesh Chopra's relevant observations were non-binding, and L&T's communications—ambiguous in the first EOT and absent thereafter—did not meet notice standards. The tribunal's award was deemed a jurisdictional error, breaching public policy by ignoring contractual terms and judicial precedents. The court also criticised the tribunal's arbitrary 50:50 delay attribution and unsupported damage quantification. The court observed that 'an arbitrator, being a creature of the contract, cannot ignore its express terms, and awarding compensation in violation of such terms constitutes a jurisdictional error against public policy.'
New Indian Express
22-04-2025
- Business
- New Indian Express
Andhra granted Rs 93 crore to NECL for Polavaram works
VIJAYAWADA: The State government has granted administrative approval for a payment of Rs 93.93 crore to Navayuga Engineering Company Limited (NECL) for its work on the Polavaram irrigation project, according to an official statement issued by the Water Resources Department. The payment includes, Rs 57.56 crore as per the terms of the agreement and an additional Rs 36.37 crore to be disbursed with the final bill. NECL was tasked with executing the balance head works of the project under a 2018 agreement, which was mutually pre-closed as per Clause 89.3 of the General Conditions of Contract (GCC). The company submitted a consolidated claim, prompting the government to form an expert committee in May 2022 to review the claims. The committee, comprising Engineer-in-Chief (Irrigation) C Narayana Reddy, Chief Engineer (PIP) B Sudhakara Babu, and Advisor (Designs) M Giridhara Reddy, was tasked with examining the claims in line with agreement conditions. Based on the panel's recommendations submitted on September 30, 2022, the government approved the payments after careful consideration. The Chief Engineer of the project has been directed to take further action to facilitate the disbursal.
