Home Case Index All Cases Companies Law Companies Law + SC Companies Law - 2003 (4) TMI SC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2003 (4) TMI 438 - SC - Companies LawWhether the Court would have jurisdiction under section 34 of the Act to set aside an award passed by the arbitral Tribunal which is patently illegal or in contravention of the provisions of the Act or any other substantive law governing the parties or is against the terms of the contract? Whether the award could be set aside, if the arbitral Tribunal has not followed the mandatory procedure prescribed under section 24, 28 or 31(3), which affects the rights of the parties? Held that:- The impugned award directing the appellant to refund US $ 3,04,970.20 and ₹ 15,75,559 with interest which were deducted for the breach of contract as per the agreement requires to be set aside as there is specific stipulation in the agreement that the time and date of delivery of the goods was the essence of the contract & in case of failure to deliver the goods within the period fixed for such delivery in the schedule, ONGC was entitled to recover from the contractor liquidated damages as agreed. As it was also explicitly understood that the agreed liquidated damages were genuine pre-estimate of damages & on the request of the respondent to extend the time limit for supply of goods, ONGC informed specifically that time was extended but stipulated liquidated damages as agreed would be recovered,liquidated damages for delay in supply of goods were to be recovered by paying authorities from the bills for payment of cost of material supplied by the contractor there is nothing on record to suggest that stipulation for recovering liquidated damages was by way of penalty or that the said sum was in anyway unreasonable; Thus in certain contracts, it is impossible to assess the damages or prove the same. Such situation is taken care by sections 73 and 74 of the Contract Act and in the present case by specific terms of the contract.
|