Original Petition No. 79 of 2077 · The High Court · 2025

Judgment

(Per Hon'Lr1e. Justice Moushumi Bhattacharya)

1. The Appeal, filed under section 37(1Xb) ofThe Arbitration and Conciliation Act, 1996, assails an ordcr passed by the learned Commercial Court on 30.O3.2022 in Commercial Original Petition No.79 of 2077 . By the impugned order, the Commercial Court dismisscd the appellant's petition filed under section 34 of the 1996 Act for sctling aside an Arvard dated

17.t2.2016.

2. The appellant was Lhe respondent in the arbitration. The respondent No.1 was the claimant. The arbitration culminated in the Award dated 17. \2.2016 passed by a Tribunal consisting of three learned Arbitrators. Apart from challenging the impugned order dated 30.O3.2022 passed by the Commercial Court, the appellant also seeks to set aside the Award dated

17.12.2016. The appeilant however restricts the scope of the 2 Appc:il to the: extent of the loss of profit arva:cled lrv thc.Arbitral Tribunal in favour of the respondent No. 1/clzLima n l.

3. But lirst, a brief narration of the relev,tnt la<_-tr; leading to the Au'ard rrnd the impugned order.

4. [n .tune, 2012, M/s Gayathri projr:cts Limited (GPL) /P.ncipal Emproyer issued a Tender Notificrtirn inviring bids itr desiqns, engineering, supplies, erectiorr. t:sting and commissioring of 4,O00 TpH External Coal {land. jn,3 plant for constntcti(,lt of 2X66O MW Thermal power f,lan :1e zeloped by NCC Powe - Projects Limited at Krishnapatnam. The appellant (M/s NCC l, mited) and GpL were partners in zr Jornt Venture for developmerLr of the said power plant. The zrppe llanl ancl the rcspondcnt No. 1/claimant (M/s. Elecon EpC pro jrct s Limited) enterr:rl intt a Cor-rsortium Agreement clated 27 OS.llO12 u,ith the apnellant ns the lead partner. On 29.Og.2O12, LiLc appcllant submirl.eci ir s bid to GpL on an individual basrs rvith the undersland ltg that upon securing the contrzLct, tlrc appellant would erntet into a back_to_back contract wit.-r the re spondent No.1 exr:ept for the construction of civil works. Beiore finalizing the con:ract ivith GpL, the appellant issued eL Lett:r of Intent (LOI) clrrtr:d 19.12.2012 to the respondent No. rviLi- a conLract value ol' Rs. I 83 Crores and a contract period ol. 22 r or ths from I I 3 the date of the Lol. on 09 .02.2013 and 1 I .02.2023 , GPL issued Letters of Award (LOAs) to the appellant and the appellant issued 2 LOAs to the respondent No. 1 on O2.O3.2O13. The respondent No.1 submitted an Advance Bank Guarantee of Rs. 15,48,56,90O/- and a Performance Bank Guarantee of Rs. 16,49,89,400/ - in terms of the Agreement. The respondent No.1 also issued a LOA to the M/s. CKIT Conveyor Engineers of South Africa for availing of Professional Services for the 7.5 KM Pipe Conveyor Installation.

5. On 03.O5.20i3, the appellant released Rs.12 Crores as advance and thereafter the balance of Rs.3,48,56,900/ -, against which the respondent No.1 submitted a Bank Guarantee for Rs.15.48 Crores. The respondent No.l started the work on

17.05.2013, as per the LOL On 27 .O8.2O73, the appellant communicated the approval of the respondcnt No.1's designs and other permissions between August 2Ol3 and October 2013. In OcLober 2O13, there was a change in the management of the appe llant-Company. In December 2013, GPL instructed the respondent No.1 to proceed with the critical engineering works.

6. On 79.04.2014, GPL awarded the same scope of work to M/s.Macmet India Limited although the contract awarded to the respondent No.1 was not expressly terminated. On 05.06.2O14, 4 the appe lant invoked the Advance Bank (iL1 lrantee of Rs. 15,48,5(i,900/- which led the respon(ient N(). 1 to file pctitions rrrder section 9 of the 1996 Act beforr. the District Court at llrrrga Reddy, Hyderabad. The restoncle nt No.1 hled O.P.Nc,s.34 1l and 364 of 2014 for injunction on the:n,rocation of the Bank (itarantee and performance Bank Ciuarant< e and also issued a n,rlrcc for invocation of arbitration tt the a;rpellant on 05.07.:2014. 1'fre respondent No. 1 claimecl Rs. 1Cr1,613,18.00O/_ from thc ap,pellant.

7. i'he ,\q.ard was passed on 17.12.2076 in ltvour ,rf the resporrlcnt \o.1 lor an amount of Rs.5,09,49,62il,,. rrlong rvith interest it 1296 per annum ancl Rs.S Crores tou,:rrds damages togethcr r,".i _h rnterest @ t2% per annum frorn the d ate of the Arvarcl trll rr:alization. The appellant,s petition for s,:ttir g aside of the Au,ard luas dismissed by the Commercirtl (lollrt on 30.03.2022 (mpugned order) Ieading to the prcsen[ \prcal.

8. ()L'r 1C.1O.2022, a Co_ordinate Benctr ol. this Court grantccl tire rrppellant 8 weeks to deposit the au.arrlc<[ alrlount and thr: res:ondent No. 1 was permitted to withdrzLu. thc said amounl. On 19.O1.2023, the appellant deposited Iis. g Crores and sor-rght f rr time to deposit the balance o I Ils. !r , 6 5 crores which ri as g,r an ted by the Co-ordinate Bench . Th,: r Lppellant I I 5 has deposited Rs.17.66 Crores as on date and the respondent No.l has furnished a Bank Guarantee for an amount of Rs. 19.50 Crores which is lying with the Commercial Court in COP No.79 of 2017.

Arqu ments advanced on behalf of the Parties g. Learned Senior Counsel appearing for the appellant submits that the award of damages in favour of lhe respondent No.1 lor loss of profits is patently illegal and contrary to public policy sincc there was no breach of contract and the respondent No.1 lailed to bring any material on record in support of its claim for loss of profits. Counsel submits that the claim was awarded solely on the decision of the Supreme Court in A.T. Bnj PcLul Singh Vs. State of Gujarati . Counsel submits that the Commercial Court lravelled beyond the scope o[ the section 34 application in giving further reasons in support of the award o[ loss of profits by relying on Hudson's formula. According to counsel, damages cannot be awarded under section 73 of The Indian Contract AcL, 1872, in the absence of evidence of loss of profits. ' lresa; + scc ss 6 policy "dmitted 1 0. Lea -ned Senior Counsel appearing lbr h r: respondent No.1,'clairnant submits that the claims v,,ere -ru tltortcd by evidcncc tnd were meticulously addressed by tl-r: Tribunal. Counsel asserts Lhat interference based on _unciantr:ntal is or:h r.r irrr.anLcd in exceptional circum"stanr:cs u,hich arc absenl in [he present Appear. counsel submits that the appellant's failure to notify the respond:nt .Vo,1 of the termination of the principal contract formed the ;rrir nxry 6."i" for lhe As,iL.-d. Counsel urges that the Tribunal c.orrr ctlv found that rhe ag peilant's fairure to notify the resp.ncrent uo_ I of the contra(:t te - rtination amounLed to a material brea,:l_r Counsel submi,-s tha r the respondent No.1 continued to ]:re rlbrrn the u,ork Lo rhc bi:neilt of the appellant and that the.l.:il>trnal was justifiecl in upholding the principal claims a n cl avr.arding consequenttz,l damages for loss of profits. The Porrr t w r ich fails fo rA diudication 11 'l'he co 'rt roversy before the court is whe.ther- [hr r Arbitral awarding Rs.5 Crores to the Tribuna rv ts justified tn responcl{lnt ttrt.1/claimant as damages for loss of proiitr., i I I I i I i i I I i a 7

12. As stated above, the appellant has challenged only this component of the Award and has not pressed any of the other claims which were allowed in favour of the respondent No. 1.

13. Our decision on this point is given under specific _ headings for a better delineation of the issues involved. Decision:

14. The basis for awarding damages for loss of profits was on account of the respondent No.1/claimant bearing the consequences of short-closure without notice thereof. Thc claim for damages for loss of profits was the eighth and the last claim of the respondent No.1 in the arbitration. The total claim amount was for Rs.101,68,18,0OO/-. The claimed damages under the head of loss of prohts was Rs. 18.30 Crores i.e., lO 7o of the contract value. The Tribunal awarded Rs.5 Crores for loss of profits. Thc Undis uted Facts before the Arbitral Tribunal

15. The appellant and GPL were shareholders in NCCPL. cPL short closed the contract with the appellant on account of changes in the management structure of the appellant. The ,ai t 8 responde-rt No. 1/claimant was admittedly kep, 1n the dark about thr short-closure. The respondent No.1 expecLed rhat the contract "r'ould be awardcd to it on reviserl terrts despite the changcs ir thc management structure of the appe 1a rt_.

16. 'lhc respondent No.1 engaged a con: ultant for procLre[lcnt o[ projects and the service zrgre,:t1e 11, u,ith the consLLltan t $.as part of the records. Moreovrtr, c,rdet.s were also placed \\,ith M/s_CKIT Limited of South Africa f:rr the Design and l}'rgir.recring of thc Pipe Conveyor System. 'l'L e appcllant did rrot c,lrject to the quality of work at an]. t)ojnt of time. Althoueh there is a controversy regarding the quantum of work complctci 1t1' thc respondent No. 1, GPL assesserl ,hr work done as 1!) 21o1, up to October 2013.

17. The ','ontractual rclaLionship between the tp rellant and the r,:sporr,lent No-1 continued till 26.10.2013. TJrc respondent No.1 cont nued to perform the work and lhe appellant contirLued o cnjoy the services and beneflts of rhert u,ork. The resporrden t No. 1 came to know on lg .O4.2O14 11-rz t GpL had awardcd the same nork Lo M/s.Macmet. The appellant meanu.hik stayed away from meetings ilnd :rn g form of exchanse ^ith the respondent No.1 from Octobcr, :2C 13 to April 2011 I t \ t E 9

18. The Arbitral Tribunal allowed most of the claims of the respondent No.1 including part-claim for damages for loss of profits to the cxtent of 5 Crores against the claim of 18.30 Crores The lndian Contract Act, 1872 and Compe nsation for Breach

19. The Indian Conlract Act, 1872 does not dellne the word 'breach'as a standalone act or omission. Sections 73 and 74 ol the Act ensure compcnsalion as a consequencc of breach' Section 37 of the Act clarihes a pre-breach situation by declaring that the parties to a contract must either perform or offer to perform their respective promises unless such performance is dispensed with or excused under the provisions of the Act or under any other law. Section 39 gives the promisee thc option to terminale the contract when the other party has refused to perform or has disabled himself/ hersell from performing the promise in its entireLy. This option is subject to the promisee's acquiescence either by words, actions, or conduct.

20. The appetlant indisputably benehted from the work done by the respondent No.l/claimant but suppressed the fact of 10 :a;r:: short-clcs,ure keeping the respondent No. I in ,hr, clark. The appcllan' on the other hand, did not srLfler iLn.. loss which wor-lld ltc cvidcnt from the appellant not filing ar.,, _-ounLerclaim in the ar ritration for darrrages. 21 . Th,: qp6slior-r is whether thc Arbitral l.ribur ral oversLepped its lrmits rn relying on A.T. Bnj paul Sjngh .supra) br awarding 5 Clrtres to thc respondent No.1 as damagr,s fcr lo ;s ol. profits. The arvarc should be viewed in thc factual corrt,--xl of ,A.7. Bnj PauL Sitc lt (supra) and Hudson,s fomula u.hi,.:l L tr,rovided the calculatlrtr tcmplatc for Lhe Supreme Court in tl ai c.rsc.

22. In 4.7. Bij poul Singh, the Supremo Corrrt dealt with brear:h of a u,orks contract and of the contrar;tor s t:n Litlernent to damagr:s 1or loss of profit consequent to thc I:rcach. The Suprentc rlourt held that the plain Liff/ contrac Lor \,,ar; entitled to dameLgt's I ndcr the hcad ..loss of prolits,, r,r,it h r :ferr:nce to Hudson's Btrilding and Dngineering Contrar:L: (r;ornmonly referr:cl t<, as Hudson,s formula) and direcled r_l-t: re:spondent State ro par. Rs.2,OO,OOO/- as damagcs for br,:aclr. .ll e Suprcme Court nolr:,1 that the plaintiff/appellant had rel:c.d upon the decision o l' the same High Court in a connec,,e:l proceeding lt'here the Court had acceptecl the claim for l tsr.; of proht computed rri 15% of the value of the unexecuLed u.or.i. Despite I \ \ LL the decision in the connected matter, the High Court had refused to accept the appellant's case on the ground that the appellant had not produced relevant documents to establish its claim. The Supreme Court accordingly hetd that the High Court should have accepted i5% of the value of.the. balance of the works contract as a reasonable measure of damages for loss of profit since the appeal concerned the same scope of work.

23. Neither Section 73 nor Section 55 of The Indian Contract AcL, 1872 provides for a mechanism for assessment of damages for breach or failure to perform a fixed-time contract, respectively, notwithstanding the legislative intent to compensate a party who suffers on account of the breach or non-performance.

24. In fact, Section 56 of the 1872 Act also contemplates compensation for loss through non-performance of an act which the promisor kncw to be impossible or unlawful, as opposed to the promisee who was kept unaware of such impossibility or illegality. The underlying thrust of these provisions is simply to compensate the innocent party who has suffered due to the act ol another, whether on account of breach, faiiure, or impossibility of performance. 72 'a

25. Section 7O of The Indian Contract Act, I872 rnvigorates the framer,,ork by stipulating that a person 'vho cnjr,ys a lawful, non-gratl.itous act of another or receives a benciir lr rm such act musl ( orr I)ensate the latter for the bene fit receivr'rl. Ser:tion 7O woukl ap:ly u,ith lull force to the facts of this c:rsr, since it is undispute(l that the respondent No. I continueil ro perlorm its contlactual obligations while the appellant colrtinr lcd to reap the benefils thereof, on a deliberate act of suprprer;sion of the short-closrrre from the performing party/respondent No.I .

26. The ,lourts have thcrefore liltcd the lacurrir il adopting a fair mear :; ol assessing damages in suitablc c:a;e:s on the overa:chir rr1 nced to compensate the party rr,, ho ha s ;r-rffered the brear: h. The Au'arcl for Loss of Profits should be place I in con Lext

27. The 'espondent No.I presented comprehcr si,c ctidence in suppor- o[ its claims forming the foundation ror thc loss of profits, TL r: Tribunal's decrsion to allow lessi thittr I /3rd of the respondenL No.1's claim for loss of profits, that i:, ii Crores as opposed t(, 18.30 Crores, certainly cannot be des-:r iltcC either as fancili.rl or ,trbitrary. It is relevant for contex tuaL ...u,.poses that even Er con servative investment such as a fixed r1e1 osil would t I t \ 13 yield an annual return of 87o; whereas the respondent No.1 has been awarded 2.75%o of its claimed loss of profits. Hence, the Award of 5 Crores, as against 18.30 Crores, represents opportunity costs and essenLially serves as compensation for the untimely closure ol the contract at the- behest of the appellant and GTL.

28. Opportunity costs, as a consequential damage, is a remedy to which every business person is entitled to in commercial contracts. The expectation aligns with the doctrine of business prudence and the primary objective of a person to enter into commercial transactions with another.

29. The award of 5 Crores must also be assessed against the respondent No.1's claim ol- 18.30 Crores which approximately represented 7O%o of the total project cosl of 183 Crores. The Tribunal employed Hudson's formula (without specifically naming it) which is recognised as a fail-safe me[hodology for assessing damages for loss of profit in major contracts arising from competitive tenders which has been judicially endorsed in McDermott International Inc Vs. Bum Standard Limited 2 . Hudson's formula calculates costs by using thc percentage of head offlce overheads and profits specified in the contract, '(zooo)rr scc rar 1-4 multipliel by the contract sum, divided by the :orrtract period and iurtt or multipiied by the period of delar in ,liLr.s.

30. Hucson's formula has also found mer:tior it r;e r.eral other cases as a n indicator lor measuring damages f:lr Ic ss of profits in ttre face of rescission / breach of contract.

31. IIetr rc, the Arbitral Tribunal canrrot lt: faulted lor emplo\.inll a formula for calculating just ccmpc ns rtion to the responde;t[ No.1 after recording its satisfaction r:t there had indeed bcen a material breach of the contract ternrs. the lleeist )f the Case within the Statutorv F l'a m(t\'. or k

32. It is undcniable that the Arbitral Tribrrn:r. tiruncl that the appc:I ant's farlure to notify the respon,lcnt N r. ] of the lermjnatic I r / short-closure of the contract aIrruntcci to a material ltrcach. The finding of material I rc rch u,oulcl automaticall,r, trigger seclion 73 of The InliarL (_tc nLract Act, 1872, lr,h rr:h provides for compensation fc,r lL)ss or rlamage conscqucr t to breach of contract. Section 73 of th-. I ct declarcs that the pa rty rvho suffers from the conseqrrenr:e _. r f a broke n contracr i ; entitled to receivc compensation 1itr a ny loss or damaqe r;etrsed by the party who has cause,,i thc breach. The loss u,Oukl cncompass the effect and corLsequ.,,n,;c s of the I I \ \ I I i l l ! I i I i t i 15 breach which was within the contemplation of the parties at the time of entering into the contractual relationship.

33. Admittedly, the appellant abstained from meetings and correspondence with the respondent No.1 lrom October 2013 to Aprrl 2014 due to the change in the appellant's management commenced from October 2013. The respondent No.1 nonetheless continued to perform its contractual obligations during this period and only came to know on 19.04.2074 th.at GPL had awardcd the same work to M/ s.Macmet. The appellant invoked the Advance Bank Guarantee of Rs. 15.48 Crores much later, on 05.06.2014. The respondent No. I invoked the arbitration clause on 05.O7.2014. Hence, the respondent No.1 continued to work during the 6 months interregnum under the belief that the contract subsisted between the appellant and the respondent No. 1 as executed in December 2OT2lMarch 2013.

34. The above facts u,ould show that the Arbitral Tribunal merely evened the scales ol justice by awarding 5 Crores as loss of profits to the respondent No. 1 for the balance work which the respondent No.l could have performed had the contract not been short-closed. I i i : I 16 Th,t _Qomf cnsation awardcd does not amount to ar lJnexpected Wir-rclfall

35. Reir;onable compensation for an ir jun- sr llered b5r a contracti 1q party may be assessed by an estimalior. based on a prac1.ical, rough and ready approach for corr ;le nsating lhe innor:cnt ltarLy without delay for the loss alrea t1. sulfercd by that par[',. The law permits a reasonable legr.c: c f cstimation for c1--tirnli'ication of damages once the Arbitrator-s rre satished of tl-1,: lac 1 of breach by one of the parties to th,: c onlract and darnage :;uffcred by the other. Formulac slrcl e s lludson,s formula cc me to the aid in siluations .r,r,here tl^e Tr ibunal may not have ,:xact figures at its disposal or .,irherr t tr: eviclence prodrrced lacks a precise estimation of foreseeablc lo;ses

36. The rluestion is: Would a party in sucl- cases Ic leit in thc iurc}, ol trts unccrtainty? The answer musl be i.: t he ncgative since l'ailrrre to prove losses with granular c jrlil.nt], cannot prev€ 11t tlrr: Court from relying on a reasonable -,sr im:rtion for awarc o[ c.]mpensation. The bottomline is th it thc er;timation of loss must be reasonable and not exaggerated. .1. )arty must suitat,h. lrc compensated and the Court mu s _ r 11211- 11p6n attendir-rg lircts with regard to the cxtent of loss. ln hc prcsent I I \ 1 77 case, the respondent has presented its quantum ol damages in a tabular format which the Award records as Document C-88.

37. In any event, the award of 5 Crores which is less than 3Zo of the contract value cannot, under any circumstances, be termed as irrational or legally unsound. The Award for Loss of Prollts is not bereft of Reasons

38. Brcach of contractual obligations can assume various [orms. Disabling anolher party from perlorming his/ her contractual obligations or disabling oneself from performing, would also amount to breach. In other words, self induced frustration of a contract would also amount to breach.

39. The appellant's failure to inform the respondent of short- closure of the contract at the relevant time, despite being priry to the same, amounts to disablement of performance as contemplated under section 39 of the 1872 AcL. ln other words, once the contract between the GPL and the appellant was closed on 26. 10.2O13, the appellant as the promisor, had an obligation to communicate this fact to the respondent, namely, that the appellant was disabled from performing its promise in its entirety. 18

40. GFl, short-closed the contract with the alrpellant; the appellanr \\:as aware of the said untimely-closure 'l he appellant hou'eler ailed to communicate this fact to Llre respondent which rc s,ulted in the respondent contin lng 1o perform its obligations under the contract and the appellant reaprng the benr:fit cf the same. The Arbitral Tribunal f:,u ed rhat Lhe responde r I \ .as entitled to damages for expectcc p rohts due to the appc.lant's suppression of the fact of short-cltsure which kcpt the lespondcnt engaged in Lhe work u,hilc t rt: appellan t continue(l L0 collect payment from GPL for the r,;c rk clonc by the responde tt.

41. 'lhe reasons given by the Arbitral T.-ibunal for compcns.L; illg [he respondent for the projectcd loss lr-e lterfectly just.ifiabk in the above factual matrix. In fact, r,r.r: lind that the rclcvzrnt part of the Award outlines the basis, 1tr grant of comllens. tlon to the respondent on accoultt of lor;s oi profits contran t ) the allegations made on behalf oi th I appellant. Damages ,,r,.ere not awarded in a vacuu rr or \ .ithout any appLcatior of mind. The Arbitral Tribunal clearlv irrriculated its reasons lc r doing so, namely, that , 1 ! i I l 19 (i) The respondent made necessary preparations for the work expecting substantial prolit. (ii) The respondent had executed the work for the beneht of the appellant but had not been paid for it. (iii) The respondent conLinued to work .despite short- closure of the contract which was not communicated to the respondent. (iu) The appeliant benefited from thc work done by the respondent and was rewarded for the same. (") The appellant did not suffer any loss due to the closure of the contract. (ri) The project was conceived on a large scale requiring specialized technical expertise. Hence, the respondent was en titled to damages on expected profits.

42. These reasons are not oniy rational but reasonable u,ith relerence to the quantum. The fact that the respondent incurred substantial expenditure on account of the project is evident lrom the other heads of claims which were ailowed by the Arbitral Tribunal. In our view, the award for loss of profits should be seen as concomitant to the other claims allowed by the Arbitral Tribunal in favour of the respondent. a 20

43. It s; imperative that the Arbitral Tribunal Le irllou,ed a free plal, in t:e.joints in its assessment of the t,lcts anr ,:onclusions thclr:l-rort. A paralysis in its ability to arri",c at u,c ll-co nsidered der:isions; ..','ould be contrary to the obje ct of tlre 1996 Act. A comrron ltusiness sense for arriving at broird esr itr ates without granular rtccuracy is within the settled cor tours o ' ihe arbitral domrrin.

44. In r ssence, the award does not give anr. r.el rson to hold that thc i\-bitral Tribunal transgressed beyond iLs, cl rrn:un. ths l'srut cter o[ lnterfercl] ce narrows dorrr,'rL as thc lqQvq up ! 1c hierarchv of Courts roceedin S

45. It is rvell seltled that a Court hearirLg alt A lpcal under section 3l' of the 7996 AcL should be more crrrumspect in mattors oI rnterlerence as the scope for such is na:r.ror,rcr than in an zrpplicrrtion for setting aside of an Award uncler s er:tron 34 of the I 99i't i\cr. An appeal from a decision lrpholrlrr g an award calls for greaLer caution as the grounds lbr ::n ler ference are restricted ,o absence of reasons, patent illegalitl. ot. per.versity. Sectic,n 37 of the 1996 Act does not contempllt( the Court embarkinlJ on a fact-finding exercise for re_ a pp -aising the I I \ \ 21 evidence, unless the Arbitral Tribunal has ignored the evidence before it or has arrived at findings contrary to the evidence

46. Simply put, the appellate Court would strive to preserve the Award and the order of the section 34 Court unless they are found to be perverse, patentiy illegal or in conflict wrlh the public policy of lndia in all respects. 47 " The Referral Court should therefore restrain itself from interfering with the discretion exercised by the Arbitral Tribunal unlcss the discretion is found to be unreasonable and in dcfiance of logic.

48. The Iaw with regard Lo the Appeal Court steering clcar o[ interference was arti.culated by the Supreme Court in NTPC Ltd. Vs. M/ s.Deconar Seruices Put. Ltd. 3 and Dgna Technologies Piuate Limited Vs. Crompton Greaues Limiteda . The principal consideration before the Supreme Court was whether the Arbitrator's opinion reflected a possible view on the evidence as opposed to the Court higher up in the hierarchy linding a clifferent conclusion to be equally possible. The Supreme Court negatived the inclination to interfere in such cases and reinforced the authority of the Arbitral Tribunal as master of the 3 (2006) 11 SCC 181 4 (2019) 20 SCC I i t I i I I a 22 evidencc Oil & Natural Gas Corporation Ltd. V:;. Sr..ut Pipes Ltds helcl tha interference on the grounds of firndar.tental policy of lndizrn [rL'r' is only warranted in exceptional czrse s where Lhe lrnding g,iven by the Arbitral Tribunal is ex far:ie contrary to public pc,licv or against the basic notitns ,tl justice and morzrlily. 49 . 'I'h,: reliance placed by the appellan , on Llnibros Vs. AII Indie;. Ra.,1io'1 must be seen u,ithin the contlxt o1 tlLc particular facts befc,r c the Supreme Court where the cornpu _:rtLon of loss of profi, u'as :rssessed in a case of delay in perfcrn.ancc of the conlract ttlributable to the employer. Moreover-, in Lhibros, the Supreme .lol-lrt was confronted with two l\\vat-C s trising from the samt c)aim i.e., for loss of profit anrl fou,rd the second An,a rd to br: a virtual reproduction of thc first. T -rr: Supreme Cor-trl ho,r er".r:r acceptcd Hudson's Formula .ts ar cre( iltle method for comprr tng loss of off-site overheads and crofits.

50. In hc present case, the appellant sccks to srgregate the Arvard of I rss of profits from Lhe oLher parts of the l.ward. This Court- rs unable to accept the stand as that l..ror rld cause a chasm bet,vcen the reasons and the underll.ing firct ual context. Morcover. slicing the Award into unnatural u,eclg1cs r,,ould result 5 (200:l) s st c 7o5 t 2023 -qCC Ont-ine SC 1366 I i \ \ in an incomplete reading of the reasons for allowing the claims. In fact, restricting out gaze only to the award for loss of profits would reflect oniy a part of the justiltcation for allowing the claim. The award for loss of prohts cannot be divorced from the overall factual context underscoring the findings given by the Tribunal for allowing the other claims of the respondent No.1. Conclusion 5I . We do not Ilnd the impugned order passed by the Commercial Court on 30.03.2022 falling loul of any of the grounds on which the award would fail under section 34 of the Act. The Commercial Court upheld the Award after recording its satisfaction with the reasons given by the Arbitral Tribunal. The Commercial Court also found that the findings of the Arbitral Tribunal we re supported by evidence. Thc Commercral Court rclied on scction 7O of the 1872 Act to conclude that the respondent is entitled to compensation for the work done and the expenses incurred for performing the contract. We do not find the rcasons given by the Commercial Court to be perverse or againsL the law as discussed in the preceding paragraphs of this judgment. \ t I I t ) l i I I 24 52 Th: impugned order dated 3O.O3.2022 passed by the Conrmcrr: al Court does not warrant anr inlerfe rence. The Ar.vard lated 17.i2.2O16 like,"vise shur-rs ary lorm of interfcrerr,:e, The above discussion gives the r(lar,ons for this vieu. ln anv cvent, upending the entire.Awzrrd or iy on one head i-e.. au.arl of damages for loss of profi,s is arr unnatural procr:clur: lor assessment and contran to t.L e statulory manrlzrte. C(l \lCA No.29 ol 2022 is accordinglv cLisr .rissed_ Ail conner:terl applications are disposed of. [n _crirLt ,tr l,:rs, if any, i I shall s Lzrr rl vacated. //TRUE COPY// SD/- I(. ;RINIVASA RAO JOINT REGISTRAR I}EI]T/ON OFFICER One Fair Copy t,: the HON,BLE JUSTTCE MOUSHUMT BHATT,ACHARYA (For Her Lordship,s finA eerusifi- One Fair Cop.y to the HON,BLE JUSTTCE B.R.MADHUSUDHAN RAO (For His Lordship,s t<ina eeiusaif"''-"-"' To, '1. The Principar speciar court in the cadre of District Judrye for Triar and Disposal ol Commercial Disputes, at iVO"rJ"J t*ith recc rds, if any) 2. One CC to \,,tr lvtohammed Omer F"rooi, nouJJute [oF,LrC] 3. one cc ro lr4r K.v pavan Kumar, Ajr"ilt"loi,uc,f 4. 1 'l LR Cop ir;s . Union of rndia Ministry of Law, Justic: and company 6. The Secrelary, Advocales Association Library, High Court,,or the State of _ Tetangana. High Court Buitdings ,i ivA"r.OI.i' '' 7. Two CD Copies Kam/sh /l"w I[:,.::i,::;t":,,.n:,ro, I I -)-:'- I HIGH COURT DATED:23,tA412025 JUDGMENT COMCA.No.29 of 2022 $r "s\s *' ,,,/. {,.

1. l I I I I I t I I DISMISSING OF THE COMCA @ "t-r{ )e\