Section 34 Court Upheld Arbitral Award for Liquidated Damages
Judgment dated 23.10.2026 of the High Court of Bombay in Commercial Arbitration Petition No.443 of 2017 of Kumar Urban Development Private imited Vs. The Jal Ratn Deep Cooperative Housing Socity, Mumbai
Arbitral Award of Rs.6.20 crores under Clause 26 of the Development Agreement dated 12.1.2011. The liquidated damages were calculated at Rs.10 lakhs per week for 62 weeks after adjusting the security deposit of Rs.1.10 crores and hardship compensation / corpus Rs.2,42,50,00,000/-.
On 12th January 2011, the Petitioner-Developer and the Respondent-Society executed Original D.A along with Power of Attorney and further it is the Petitioner-Developer’s contention that around the same time, the Petitioner-Developer paid Rs.1,25,000/- to each member of the Respondent Society aggregating to Rs.1,21,25,000/-.
On 10.8.2013, the second Development Agreement was executed.
the impugned award dated 3rd March 2017 was passed by the learned Sole Arbitrator directing the Petitioner Developer to pay a sum of Rs.2,67,50,000/- as and by way of damages with costs as quantified within two months from the date of receipt of the award being the compounded effect of adjudication of claim and counter claim.
In the present case, the core of the dispute is in respect of the liquidated damages which had been awarded by the learned Sole Arbitrator to the Respondent-Society in respect of delay on the part of the Petitioner-Developer to complete the construction of the building. The entire controversy hinges on the interpretation of Clause 26 of the Original D.A. dated 12th January 2011 and the intent of the parties and the wordings contained therein. This to my mind is the heart of the matter and it is only on an interpretation of the aforesaid Clause 26 of the Original D.A. that the present controversy ought to be decided. It would be therefore beneficial to reproduce the provisions of the aforesaid Clause 26 of the Original D.A. along with Section 74 of the Contract Act:
