PALI HILLS BREWERIES PRIVATE LIMITED v. CARLSBERG INDIA PRIVATE LIMITED

amount considered to be reasonable by both the parties and Digitally Signed By:MAYANK Signing Date:22.01.2026 18:37:48 O.M.P. (COMM) 595/2020 the Tribunal has found that although there was a novation and modification of the Agreement in June 2016, the Claimant agreed to the modification without waiving any rights under the Agreement. Before 17 June 2016 there is no evidence that the Claimant accepted any performance from the Respondent although after 24 April, the originally stipulated time period - 135 days for achieving the Start Date had expired. …. Counter Claim No.1:

#111. The details in relation to Counter Claim No.1 have been set out at paragraph 33 above. This Counter Claim No.1 is for electricity charges incurred by the Respondent to "preserve" the Products. The period during which the Respondent, as claimed, incurred these charges is October - December 2016. The Tribunal has already found that the Respondent was largely responsible for delays achievement of the Start Date. The Respondent is, therefore, not entitled to any damages for the pre-Start Date period. On this basis, Counter Claim No.1 is rejected. Counter Claim No. 3:

#112. Counter Claim No.3 is for an amount of Rs.60,000/- towards rent for space occupied by "CIPL Equipment" between October 2017 and April 2018. There appears to be no dispute between the parties that CIPL Equipment had been removed by April 2018. In fact, the minutes of meetings Digitally Signed By:MAYANK Signing Date:22.01.2026 18:37:48 O.M.P. (COMM) 595/2020 held on 18 May 2019 and 19 May 2018 signed by representatives of both sides also confirms this fact. According to the Respondent, the 3G Labeller should have been removed in October 2017. The Respondent relies on Clause 20.1.3 which provides as follows: “20.1.3 Return all CIPL Equipment installed at the Site within 5 (five) Business Days of termination of this Agreement subject to Contract Brewer obtaining all applicable approvals under Applicable Laws. In the event Contract Brewer fails to return CIPL Equipment, CIPL will have the right to encash the bank Guarantee furnished by the Contract Brewer. Further the Contract Brewer will also be liable to pay, a delay penalty of INR 50,000 (Indian Rupees Fifty Thousand only) per day for the period of such delay. It is agreed between the Parties that immediately after obtaining approvals under Applicable Laws, if any, or termination of the Agreement, as the case may be the Contract Brewer will give unfettered access to CIPL and its nominated representatives to the Site for dismantling, packaging and transportation of CIPL Equipment. The Parties agree that CIPL shall be responsible for dismantling, packaging and transportation of CIPL Equipment out of Site within 15 (fifteen) Business Days of getting access to the Site. Any delay by CIPL to dismantle and remove CIPL Equipment inspite of Contract Brewer fulfilling its Digitally Signed By:MAYANK Signing Date:22.01.2026 18:37:48 O.M.P. (COMM) 595/2020 obligation to give unfettered access to the Site, the penalty payable by the Contract Brewer in terms of this Clause shall stand nullified. Further, it is agreed between the Parties that in the event that CIPL is unable to dismantle and remove CIPL Equipment within 15 (fifteen) Business Day time period set out above, then CIPL shall pay the Contract Brewer a penalty of INR 10,000/- per month for each month of delay. CIPL shall not unreasonably delay dismantling, packaging and transportation of CIPL Equipment.”

#113. Clause 20.1.3 makes it clear that access to the site is to be provided by Respondent for "dismantling, packaging and transportation of CIPL Equipment out of Site" within 15 days from "getting access to the site". The Respondent has not produced any evidence as to when access to site was provided by the Respondent. As such, this claim is inconsistent with Clause 20.1.3 of the Agreement and, therefore, rejected.

#114. In any case, the notice of termination of 9 October 2017 itself mentions that according to the Respondent, the termination was under Clause 3.2 of the Agreement. It is not the Respondent's case that before 9 October 2017 any notice of termination was served. In terms of Clause 3.2, six months notice is required to be provided. Taking that into account, the 6 month period after 9 October 2017 came to an end only in early April 2018. As such also, Clause 20.1.3, which had to Digitally Signed By:MAYANK Signing Date:22.01.2026 18:37:48 O.M.P. (COMM) 595/2020 be read harmoniously with Clause 3.2 of the Agreement, cannot assist the Respondent. Counter Claim No.3 is, therefore, rejected. Counter Claim No.4:

#115. Counter Claim No.4 is also a claim for rent / charges. However, this is not for CIPL equipment but for broken glass. The case advanced by the Respondent in support of this counter claim is summarized at paragraph H at page 41 of Respondent's Written Submissions. The basis on which this counter claim has been made is not indicated. Moreover, there is no evidence as to what loss at all the Respondent has suffered on account of broken glass. It is also unclear to the Tribunal as to how the Respondent is suggesting that the "broken glass .....belong to the Claimant". As such, the Tribunal is not persuaded to make any award in favour of the Respondent towards this counter claim also. Counter Claim No.4 is, therefore, also rejected.” SUBMISSIONS ON BEHALF OF THE PETITIONER

#15. Mr. Kirtiman Singh, learned senior counsel for the petitioner, opposes the present Award. The petitioner challenges the Award to the extent of the award of claim No. 1 and the rejection of counter claim No. 1, 3 and

#4. Submissions with respect to Claims of the respondent Erroneous and contradictory findings of the Tribunal in relation to evidence related to delay and reasonable compensation provided under Clause No. 4.3 of the Agreement appear to treat the said Digitally Signed By:MAYANK Signing Date:22.01.2026 18:37:48 O.M.P. (COMM) 595/2020 compensation as ‘pre-estimate’ only on the basis of word ‘fair’ 16. He submits that the Tribunal has rendered erroneous and contradictory findings as regards the party responsible for the delay. Even though the Tribunal correctly came to a finding that the time has ceased to be the essence of the Agreement, de hors the amendment or novation of the Contract, claim No. 1 was erroneously allowed by the Tribunal on the ground that the respondent had reserved its rights vide communication dated 17.06.2016. Reliance is placed on Welspun Specialty Solutions Ltd. v. ONGC Ltd.1

#17. He further submits that the parties knowingly digressed from the stipulated timelines under the Agreement. This is evident from the fact that even after the expiry of the original timelines, no further dates were specified by the parties inter se. It is significant to mention that the respondent itself failed to seek the furnishing of the BG from the petitioner within fifteen days of the effective date, i.e., on or before

26.12.2015. Such conduct, ex facie, demonstrates forbearance on the part of the respondent and clearly indicates that strict adherence to the timelines stipulated in the Agreement were neither insisted upon nor treated as mandatory. Therefore, respondent reserving its right has no consequence.

#18. The learned counsel for the petitioner further submits that no debit note was ever issued by the respondent qua the alleged claims, as per the requirements under clause No. 13.5 of the Agreement. The respondent also did not issue any notice of breach or raise any contemporaneous correspondence alleging delay in the start date. It is, therefore, evident 1(2022) 2 SCC 382. Digitally Signed By:MAYANK Signing Date:22.01.2026 18:37:48 O.M.P. (COMM) 595/2020 that claim No. 1 is a mere afterthought, raised only after disputes had arisen between the parties.

#19. Without prejudice, submitted that pursuant amendment/novation of the Agreement dated 17.06.2016, respondent itself failed to discharge its contractual obligations for a period of approximately four months, and only thereafter supplied a defective and faulty 3G Labeler. Consequently, any delay post

17.06.2016 is ipso facto attributable to the respondent alone. In fact, not only the delay in delivery of CIPL equipment but also it being defective was admitted by the respondent in email dated 05.12.2016. Accordingly, no liability on account of delay can be fastened upon the petitioner.

#20. It is also submitted that the Tribunal has expressly recorded a finding that the petitioner was ready to commence Contract Manufacturing by the end of September 2016, ipso facto, the delay thereafter is attributable to the respondent. Except, the Tribunal has failed to consider that on the petitioner‟s specific plea that the start date for commencement of production ought to have been 25.10.2016, and that it was shifted to 03.01.2017 solely on account of the respondent supplying a defective 3G Labeler. The Tribunal has mechanically accepted the respondent‟s assertion that the start date was 03.01.2017, without dealing with the petitioner‟s aforesaid contention. Consequently, the finding recorded by the Tribunal is not only contradictory to its own earlier findings, but is also perverse.

#21. He further submits that the Tribunal relied on the word „fair‟ used in clause No. 4.3 of the Agreement to award claim No. 1 to the tune of Digitally Signed By:MAYANK Signing Date:22.01.2026 18:37:48 O.M.P. (COMM) 595/2020 Rs.25 lakhs. The respondent never pleaded before the Tribunal that the losses suffered by it were because of the delay in start date. Moreover, the proof of loss cannot be dispensed with just because a clause in the contract stipulates that liquidated damages are fair or reasonable pre-estimate of purported losses. Reliance is placed on Kailash Nath Associated v. DDA 2and the position was reaffirmed in Indian Oil Corpn. Ltd. v. Fiberfill Engineer3and Constucciones Y Auxiliar De Ferrocarriles v. Delhi Airport Metro Express (P) Ltd.4

#22. He points out that Section 74 of the Contract Act, 1872 (“ICA”) a party claiming breach and seeking compensation is entitled to succeed only upon proving actual loss or damage. Placing reliance on Kailash Nath Associates (supra) where it is held that the proof of loss is a sine qua non for liquidated damages where it is possible to prove actual damage or loss and where damage or loss is impossible to prove then the liquidated amount stipulated in the contract can be awarded if it is a genuine pre-estimate of damage or loss. He submits that liquidated damages contemplated by clause No. 4.3 of the Agreement do not amount to genuine pre-estimate as they are in the nature of loss of profits for which proving losses are a sine qua non. The Tribunal gave a categorical finding that the respondent has not suffered any loss. Submissions with respect to Counter Claims

#23. At the outset, the petitioner submits that the respondent‟s contention that the counter claims were not pressed is wholly erroneous and misconceived. The petitioner has, both in the pleadings and during the 2(2015) 4 SCC 136. 32024 SCC OnLine Del 8133 42025 SCC OnLine Del 1974. Digitally Signed By:MAYANK Signing Date:22.01.2026 18:37:48 O.M.P. (COMM) 595/2020 course of arbitral proceedings, specifically advanced submissions in support of the counter claims and has consistently pressed the same in terms of the averments made and the reliefs sought. Any assertion that the petitioner had no intention to press the counter claim is, therefore, devoid of merit and liable to be rejected. Accordingly, the petitioner submits the following assailing and challenging the rejection of the counterclaims by the Tribunal. No finding with respect to petitioner’s plea for start date being

25.10.2016 and rejection of counter claim No. 1

#24. The learned counsel for the petitioner submits that it was specifically averred before the Tribunal that the start date should have been

25.10.2016 instead of 03.01.2017 as averred by the respondent as the petitioner has commenced the operations along with daily tank report to the respondent. This is evident from the email dated 25.10.2016. It was the CIPL Equipment, which was provided by the respondent itself, was the faulty since the inception which thereby led to some delay. Consequently, the respondent delayed the start date to be 03.01.2017. 25. The petitioner claimed electricity charges incurred in preserving the products from October to December, 2016 to the tune of Rs. 09,05,157/- and the same was rejected by the Tribunal only on the ground that the petitioner was largely responsible for the delays, without even returning a finding on the petitioner‟s specific plea on the start date. The same is perverse and the Award is liable to be set aside. Misinterpretation of clause No. 20.1.3 and findings contrary to the evidence with respect to counter claim No. 3

#26. The learned senior counsel for the petitioner, challenging the Award on Digitally Signed By:MAYANK Signing Date:22.01.2026 18:37:48 O.M.P. (COMM) 595/2020 the rejection of counter claim No. 3, submits that as per clause No.

20.1.3 the Agreement provides that the respondent would be responsible for dismantling, packaging and transportation for CIPL equipment after the expiration or termination of Agreement. In case of default of the same the respondent would be liable to pay Rs. 10,000 per month for each month delay. It is admitted by CW1 Jushil Kharbanda, in the cross examination, that the respondent had not removed the CIPL equipment from the premises of the petitioner and the same was removed atleast until April of 2018. Despite this, the Tribunal has erroneously found that there is no dispute between the parties as the CIPL equipment had been removed in April of 2018. The Tribunal has ignored the evidence on record in rendering the said finding. Moreover, the claim No. 3 was valued at Rs. 10,000 per month and not on 60,000/- as recorded by the Tribunal.

#27. It is also submitted that the Tribunal erred in finding that no evidence has been placed on record to show as to when the access to the site was provided to the respondent. The Tribunal ignored the evidence on record and more specifically communications dated 01.11.2017 and

24.04.2018 wherein the petitioner asked the respondent to collect the CIPL equipment from the site. Erroneous rejection of counter claim No. 4

#28. The learned counsel for the petitioner submits that Rs. 40,000/- per month were claimed as the respondent has not removed the broken glass lying in the petitioner‟s brewery. The Tribunal has misdirected itself and rejected counterclaim No. 4 on the ground that it is unclear as to how the broken glass belonged to the respondent. Digitally Signed By:MAYANK Signing Date:22.01.2026 18:37:48 O.M.P. (COMM) 595/2020 Limitation

#29. The petitioner submits that the respondent, in its written submissions, has for the first time contended that the present petition is barred by limitation on the ground that it was allegedly not served upon the respondent within the period prescribed by the statute. It is respectfully submitted that the objection as to limitation has been raised at an extremely delayed stage, in the written submissions filed at the stage of conclusion of final arguments. The respondent admittedly failed to raise any such objection for a considerable period of nearly five years since the filing of the present petition. Having acquiesced in the proceedings and participated therein without demur, the respondent is now estopped from raising the plea of limitation at this advanced stage, and the said objection is liable to be rejected on this ground alone. 30. It is further submitted that the objection of limitation raised by the respondent is without merit. The impugned Award was passed on

15.09.2020. The present petition was filed on 11.12.2020, defects were pointed out on 14.12.2020, and the petition was re-filed on 17.12.2020. The Hon‟ble Supreme Court, in Cognizance for Extension of Limitation, In re,5 excluded the COVID-19 period for computation of limitation and held that where limitation would have expired between

15.03.2020 and 28.02.2022, a fresh period of ninety days would be available from 01.03.2022. Accordingly, in the present case, the limitation stood extended till 01.06.2022. The petition was listed on

22.12.2020. SUBMISSIONS ON BEHALF OF THE RESPONDENT 5(2022) 3 SCC 117. Digitally Signed By:MAYANK Signing Date:22.01.2026 18:37:48 O.M.P. (COMM) 595/2020

#31. Dr. Maurya Vijay Chandra, learned counsel for the respondent, supports the Award and states that there is no perversity, patent illegality or violation of public policy that calls for interference of this Court.

#32. At the outset, the learned counsel, submits that the present petition is barred by limitation, as the same was not served upon the respondent within the statutory period of three months. No application seeking condonation of delay has been filed. Consequently, the filing of the petition is liable to be construed as non-est in the eyes of law. It is further submitted that since the challenge to the counterclaims was not pressed before the Court, no reply is being tendered to submissions with respect to counter claims prior to the oral arguments.

#33. He further submits that the only surviving issue for consideration is whether liquidated damages could have been granted. He places reliance on Kailash Nath (supra) and more specifically on paragraph No. 43.

#34. He points out that the Tribunal, even though does not, mention the above judgment, but it is evident from the reasoning of the Tribunal that there is a reflection of the relevant part of the ratio as quoted above. 35. He submits that the Tribunal recorded a finding that the Start Date was achieved beyond the stipulated period and that such delay was attributable to the financial distress of the petitioner. The Tribunal further held that the petitioner was ready for Contract Manufacturing only by the end of September 2016. The Tribunal also found that the parties had agreed that, in the event of delay for any reason whatsoever, liquidated damages would be payable by the petitioner, such amount Digitally Signed By:MAYANK Signing Date:22.01.2026 18:37:48 O.M.P. (COMM) 595/2020 being a genuine pre-estimate of damages. It was further noted that the respondent had expressly reserved its right to claim such damages vide communication dated 17.06.2016, despite its efforts to salvage the project amid the petitioner‟s financial distress.

#36. It is submitted that mere attempts to salvage and implement the project cannot amount to a waiver of the contractual stipulation on liquidated damages, particularly where the right to claim such damages has been expressly reserved.

#37. He further submits that such findings of fact, contractual interpretation, and application of law cannot be lightly interfered with by this Hon‟ble Court in exercise of jurisdiction under Section 34 of the 1996 Act. The findings returned by the Tribunal are cogent, commercially appropriate, and definitely plausible, and do not offend the public policy of India. An Arbitral Award cannot be subjected to a piecemeal or hyper-technical scrutiny under Section 34 of the 1996 Act. The alleged contradiction relied upon by the petitioner arises from picking up observation out of context and does not warrant interference with the Award. To set out the scope of Section 34 of the 1996 Act, amongst is placed on Associate Builders v. DDA 6 , others, reliance SsangyongEngg. & Construction Co. Ltd. v. NHAI 7, Delhi Airport Metro Express (P) Ltd. v. DMRC8.

#38. He also submits that the Court does not sit in appeal over an Arbitral Award. An interpretation of law or fact, being a possible and plausible view, cannot be interfered with under Section 34 of the 1996 Act. The