COMPENDIUM FROM CLAIMANTS

ISSUE I -

1. HRD Corporation (Marcus Oil and Chemical Division) v GAIL (India) Limited,
(2018) 12 SCC 471.

FACTS: The respondent, GAIL (India), issued a notice inviting tenders for supply of wax
generated at GAIL's plant at Pata, Uttar Pradesh for a period of 20 years on an exclusive basis. The
appellant successfully tendered for the said contract and the parties entered into an agreement dated
April I, 1999. Disputes arose between the parties, the appellant claiming that GAIL had wrongfully
withheld supplies of wax, because of which the appellant invoked the arbitration clause included
in the agreement. Justice R.F. Nariman decided in GAIL’s favour.

This extract is taken from HRD Corporation (Marcus Oil and Chemical Division) v GAIL (India)
Limited, (2018) 12 SCC 471.

13. After the 2016 Amendment Act, a dichotomy is made by the Act between persons who become
"ineligible" to be. appointed as arbitrators, and persons about whom justifiable doubts exist as to
their independence or impartiality. Since ineligibility goes to the root of the appointment, Section
12(5) read with the Seventh Schedule makes it clear that if the arbitrator falls in any one of the
categories specified in the Seventh Schedule, he becomes "ineligible" to act as arbitrator. Once he
becomes ineligible, it is clear that, under Section 14(1)(a), he then becomes dejure unable to
perform his functions inasmuch as, in law, he is regarded as "ineligible". In order to determine
whether an arbitrator is de jure unable to perform his functions, it is not necessary to go to the
Arbitral Tribunal under Section 13. Since such a person would lack inherent jurisdiction to proceed
any further, an application may be filed under Section 14(2) to the Court to decide on the
termination of his/her mandate on this ground. As opposed to this, in a challenge where grounds
stated in the Fifth Schedule are disclosed, which give rise to justifiable doubts as to the arbitrator's
independence or impartiality, such doubts as to independence or impartiality have to be determined
as a matter of fact in the facts of the particular challenge by theArbitral Tribunal under Section 13.
If a challenge is not successful, and the Arbitral Tribunal decides that there are no justifiable doubts
as to the independence or impartiality of the arbitrator/arbitrators, the Tribunal must then continue
the arbitral proceedings under Section 13(4) and make an award. It is only after such award is
made, that the party challenging the arbitrator's appointment on grounds contained in the Fifth
Schedule may make an application for setting aside the arbitral award in accordance with Section
34 on the aforesaid grounds. It is clear, therefore, that any challenge contained in the Fifth Schedule
against the appointment ofJustice Doabia and Justice Lahoti cannot be gone into at this stage, but
will be gone into only after the Arbitral Tribunal has given an award. Therefore, we express no
opinion on items contained in the Fifth Schedule under which the appellant may challenge the
appointment of either arbitrator. They will be free to do so only after an award is rendered by the
Tribunal.

2. Voestalpine Schienen GmbH v Delhi Metro Rail Corporation Ltd., (2017) 4 SCC 665.

FACTS: Voestalpine Schienen GmbH, an Austrian company, entered into a contract with DMRC
for the supply of rails. The arbitration clause required each party to select five arbitrators from a
panel provided by DMRC, but the panel consisted solely of government officers. Voestalpine
challenged the panel’s composition, arguing it violated the principle of impartiality under the
Arbitration and Conciliation Act, 1996. Justice A.K. Sikri decided in favor of Voestalpine
Schienen GmbH.

This extract is taken from Voestalpine Schienen GmbH v Delhi Metro Rail Corporation Ltd.,
(2017) 4 SCC 665.

20. Independence and impartiality of the arbitrator are the hallmarks of any arbitration
proceedings. Rule against bias is one D of the fundamental principles of natural justice which
applied to
all judicial and quasi-judicial proceedings. It is for this reason that notwithstanding the fact that
relationship between the parties to the arbitration and the arbitrators themselves are contractual in
nature and the source of an arbitrator's appointment is deduced from the agreement entered into
between the parties, P notwithstanding the same non-independence and non-impartiality of such
arbitrator(though contractually agreed upon) would render him ineligible to conduct the
arbitration. The genesis behind this rational is that even when an arbitrator is appointed in terms
of contract and by the parties to the contract, he is independent of the parties. Functions and duties
require him to rise above the partisan interest of the parties and not to act in, or so as to further,
the particular interest of either parties. After all, the arbitrator has adjudicatory role to perform and,
therefore, he must be independent of parties as well as impartial.

3. H. v. L & others, (2017) 1 W.L.R. 2280.

FACTS: A dispute arose in an arbitration where the claimant, H, challenged the impartiality of an
arbitrator. The arbitrator had undisclosed connections with individuals involved in similar legal
proceedings, raising concerns about bias. H sought removal of the arbitrator under English
arbitration law, arguing a risk of apparent bias. The English Court of Appeal ruled that non-
disclosure of such connections could undermine the integrity of arbitration. The English Court of
Appeal decided in favor of the Claimant.

This extract is taken from H. v. L & others, (2017) 1 W.L.R. 2280.

20: In my judgment, the mere fact that the tribunal has previously decided the issue is not of itself
sufficient to justify a conclusion of apparent bias. Something more is required. Judges are assumed
to be trustworthy and to understand that they should approach every case with an open mind. The
same applies to adjudicators, who are almost always professional persons. That is not to say that,
if it is asked to re-determine an issue and the evidence and arguments are merely a repeat of what
went before, the tribunal will not be likely to reach the same conclusion as before. It would be
unrealistic, indeed absurd, to expect the tribunal in such circumstances to ignore its earlier decision
and not to be inclined to come to the same conclusion as before, particularly ifthe previous decision
was carefully reasoned. The vice which the law must guard against is that the tribunal may
approach the rehearing with a closed mind. If a judge has considered an issue carefully before
reaching a decision on the first occasion, it cannot sensibly be said that he has a closed mind if,
the evidence and arguments being the same as before, he does not give as careful a consideration
on the second occasion as on the first. He will, however, be expected to give such reconsideration
of the matter as is reasonably necessary for him to be satisfied that his first decision was correct.
As I have said, it will be a most unusual case where the second hearing is for practical purposes
an exact rerun of the first.

21. The mere fact that the tribunal has decided the issue before is therefore not enough for apparent
bias. There needs to be something of substance to lead the fair-minded and informed observer to
conclude that there is a real possibility that the tribunal will not bring an open mind and objective
judgment to bear."

4. Kunwer Sachdev v Hero Fincorp. Ltd., (2019) SCC OnLine Del 6694.

FACTS: Hero Fincorp sought enforcement of an arbitral award against Kunwer Sachdev, the
founder of Su-Kam Power Systems. Sachdev challenged the award, arguing that he was not
personally liable, as the arbitration clause was in a corporate capacity. The Delhi High Court held
that as a guarantor, Sachdev’s liability was distinct from the company’s and upheld the
enforcement of the award. The court emphasized the binding nature of guarantees in commercial
transactions. The Delhi High Court decided in favour of Hero Fincorp Ltd.

This extract is taken from Kunwer Sachdev v Hero Fincorp. Ltd., (2019) SCC OnLine Del 6694.

14. Besides this, even if I were to hold that the amended 1996 Act applies, a perusal of the
Arbitrator's declaration dated 12.12.2018 shows that he has been appointed as an Arbitrator by the
respondent in only one more case apart from the matter in issue. The Fifth Schedule of the amended
1996 Act which sets out the grounds which could give rise to justifiable doubts as to an arbitrator's
independence or impartiality under Clause 22 requires a red flag to be raised when a person within
the past three years has been appointed as an Arbitrator on two or more occasions by one of the
parties or its affiliate; clearly this position does not obtain in the instant case.

5. Sudesh Prabhakar v Emaar MGF Constructions Pvt. Ltd., (2018) SCC OnLine Del
6847.

FACTS: The petitioner, a homebuyer, filed a complaint against the developer for delay in handing
over possession of a property. The dispute resolution clause mandated arbitration, but Prabhakar
argued that the clause was unfair and sought relief before the consumer forum. The Delhi High
Court held that consumer disputes could still be adjudicated by consumer forums despite an
arbitration clause. The judgment reinforced the principle that arbitration agreements do not oust
consumer protection laws. This case affirmed the special protection granted to consumers under
Indian law. The Delhi High Court decided in favor of Sudesh Prabhakar.
This extract is taken from Sudesh Prabhakar v Emaar MGF Constructions Pvt. Ltd., (2018) SCC
OnLine Del 6847.

11. A reading of the above judgment would show that the Supreme Court has held that the
disqualification contained in item 22 and 24 is not absolute and even an Arbitrator who has been
appointed on two or more occasions by the parties or affiliates in the past three years, may yet not
to be disqualified on showing that he was independent and impartial on the earlier two occasions.
In any case, distinction has to be drawn between ineligibility to be appointed as an Arbitrator for
the reason contained in the Seventh Schedule of the Act and the reasons which may give rise to
justifiable doubts as to their independence or impartiality as contained in Fifth Schedule of the
Act. Where Seventh Schedule gets attracted, party may straightway approach the Court under
Section 14 of the Act, however, in cases of Fifth Schedule, such doubts as to independence or
impartiality have to be determined as a matter of fact in the facts of the particular challenge made
by the Arbitral Tribunal under Section 13 of the Act. If a challenge is not successful, and the
Arbitral Tribunal decides that there are no justifiable doubts as to the independence or impartiality
of the arbitrator/arbitrators, the Tribunal must then continue the arbitral proceedings under Section
13(4) and make an award. It is only after such award is made, that the party challenging the
arbitrator's appointment on grounds contained in the Fifth Schedule may make an application for
setting aside the arbitral award in accordance with Section 34 on the grounds on which such party
had sought to challenge the authority of the arbitrator.

6. Gauri Shankar Educational Trust v. Religare Finvest Ltd., 2019 SCC OnLine Del
6987

FACTS: The dispute arose over loan repayment obligations. Religare Finvest initiated arbitration
proceedings against the trust for defaulting on a loan. The trust challenged the arbitration, arguing
that the agreement was invalid and sought to avoid repayment. The Delhi High Court upheld the
arbitration agreement and enforced the arbitral award, emphasizing the binding nature of
contractual obligations. The case reinforced the enforceability of arbitration clauses in financial
agreements. The Delhi High Court decided in favor of Religare Finvest Ltd.
This extract is taken from Gauri Shankar Educational Trust v. Religare Finvest Ltd., 2019 SCC
OnLine Del 6987.

10. Another reason for holding that the petitioners are not entitled to succeed in the objection raised
by placing reliance upon para 22 of the Fifth Schedule of the Act is because para 22 of the Fifth
Schedule is only a directory or persuading provision and not a mandatory or absolute provision.
Whereas the relevant requirements of the Seventh Schedule are mandatory/absolute requirements,
the requirements of Fifth Schedule are only directory/persuasive requirements which are required
to be proved in each case. The fact that the requirements of the Seventh Schedule are mandatory
and absolutely bars/illegalities/handicaps becomes clear from the language of Section 12(5) of the
Act which uses the expression ‘shall’ which clearly provides that if the requirements of the Seventh
Schedule of the Act are not complied with, then the arbitrator becomes ineligible, of course, with
a right of a party to waive the applicability of Section 12(5) by an express agreement in writing.
That the requirements of the Fifth Schedule are only directory/persuading as per the facts of a case,
becomes clear from the language of Section 12(1) (Explanation I) of the Act which states that the
grounds stated in the Fifth Schedule will only act as a guide i.e. the existence of grounds stated in
the Fifth Schedule will not automatically lead to the conclusion of justifiable doubts regarding the
independence or impartiality of the arbitrator(s). A Ld. Single Judge of this Court in the case
of Sudesh Prabhakar v. EMAAR Constructions Pvt. Ltd., (2018) 2 Arb LR 538 (Delhi) has held
that para 22 of the Fifth Schedule is only directory and not mandatory. I completely agree with the
observations of the Ld. Single Judge in Sudesh Prabhakar's case (supra) that the requirements as
stated in Fifth Schedule of the Act are only directory and not mandatory.

7. Jacob Securities Inc. v Typhoon Capital B.V., (2016) ONSC 604.

FACTS: Jacob Securities, a Canadian firm, sued Typhoon Capital, a Dutch company, for unpaid
fees under an investment banking agreement. The agreement contained an arbitration clause,
which Typhoon invoked to stay the court proceedings in favor of arbitration. Jacob Securities
argued that arbitration was not applicable due to alleged misrepresentations. The Ontario Superior
Court upheld the arbitration clause, emphasizing the principle of competence-competence,
allowing arbitrators to decide jurisdictional issues first. The ruling reinforced the strong pro-
arbitration stance in international commercial disputes. The Ontario Superior Court of Justice
decided in favor of Typhoon Capital B.V.

This extract is taken from Jacob Securities Inc. v Typhoon Capital B.V., (2016) ONSC 604.

35. The apprehension of bias must be a reasonable one, held by reasonable and right-minded
persons, applying themselves to the question and obtaining thereon the required information. In
the words of the Court of Appeal, that test is "what would an informed person, viewing the matter
realistically and practically – and having thought the matter through - conclude. Would he think
that it is more likely than not that Mr. Crowe, whether consciously or unconsciously, would not
decide fairly.

8. Porter v Magill, (2002) 1 All ER 465 at 507.

FACTS: The Westminster City Council, under Dame Shirley Porter, sold council houses at a
discount in marginal wards to favor Conservative voters, a practice known as "gerrymandering."
The district auditor found this to be unlawful and imposed a surcharge on Porter. The House of
Lords upheld the decision, emphasizing the principle that public officials must act in the public
interest, not for political advantage. The case established the Porter test for apparent bias, requiring
a fair-minded observer’s assessment of impartiality. The House of Lords decided in favor of the
District Auditor.

This extract is taken from Porter v Magill, (2002) 1 All ER 465 at 507.

88. "The Court recalls that in order to establish whether a tribunal can be considered as
'independent', regard must be had inter alia to the manner of appointment of its members and their
term of office, the existence of guarantees against outside pressures and the question whether the
body presents an appearance of independence. As to the question of 'impartiality', there are two
aspects to this requirement. First, the tribunal must be subjectively free from personal prejudice or
bias. Secondly, it must also be impartial from an objective viewpoint, that is, it must offer sufficient
guarantees to exclude any legitimate doubt in this respect. The concepts of independence and
objective impartiality are closely linked ?" In both cases the concept requires not only that the
tribunal must be truly independent and free from actual bias, proof of which is likely to be very
difficult, but also that it must not appear in the objective sense to lack these essential qualities.

9. R v Gough (1993) AC 646.

FACTS: The appellant, Gough, was convicted of robbery but later discovered that a juror in his
trial was the neighbor of his brother. He argued that this created a risk of bias, warranting a retrial.
The House of Lords established the test for bias in legal proceedings, ruling that a conviction
should be overturned only if there was a "real danger" of bias affecting the fairness of the trial.
Applying this test, the court found no such danger and upheld Gough’s conviction. The House of
Lords decided in favor of the Crown.

This extract is taken from R v Gough (1993) AC 646.

Page 670: I think it unnecessary, in formulating the appropriate test, to require that the court should
look at the matter through the eyes of a reasonable man, because the court in cases such as these
personifies the reasonable man; and in any event the court has first to ascertain the relevant
circumstances from the available evidence, knowledge of which would not necessarily have been
available to an observer in court at the relevant time. Finally, for the avoidance of doubt, I prefer
to state the test in terms of real danger rather than real likelihood, to ensure that the court is thinking
of possibility rather than probability of bias. Accordingly, having ascertained the relevant
circumstances, the court should ask itself whether, having regard to those circumstances, there was
a real danger of bias on the part of the relevant member of the tribunal in question, in the sense
that he might unfairly regard (or have unfairly regarded) with favour, or disfavour, the case of a
party to the issue under consideration by him?

10. Locabail (U.K.) Ltd. v Bayfield Properties Ltd, (2000) 1 QB 451.

FACTS: Locabail sought to disqualify a judge from hearing its case due to an alleged appearance
of bias. The judge had indirect financial interests in the case through professional associations.
The Court of Appeal rejected the challenge, ruling that apparent bias must be assessed based on
whether a fair-minded observer would conclude a real possibility of bias existed. The judgment
clarified that personal characteristics like gender, ethnicity, or background do not automatically
disqualify a judge. The English Court of Appeal decided in favor of Bayfield Properties Ltd.

This extract is taken from Locabail (U.K.) Ltd. v Bayfield Properties Ltd, (2000) 1 QB 451.

64. Although the court could not investigate the judge's motives and so could not accept a statement
from the judge that he was not biased, the court could accept, and if necessary, test by reference to
the facts of the case, statements by the judge as to what he knew or did not know at the relevant
time. We think this is right and in accordance with authority. If the judge's statement about his
knowledge is, objectively viewed, cogent, then that is the basis on which the reasonable onlooker,
or the court personifying the reasonable onlooker, will ask whether there was any real danger of
bias. If the judge's statement is, objectively viewed, an improbable one, then that is how the
reasonable onlooker will approach it.

11. TapImmune, Inc. v Michael Gardner ICDR Case No. 50-20-1300-0061.

FACTS: TapImmune entered into a consulting agreement with Michael Gardner to assist in
financial planning and securing investments. TapImmune alleged that Gardner misrepresented his
capabilities and failed to provide the agreed-upon services, leading to arbitration. The International
Arbitration Tribunal found that Gardner made false representations and did not fulfill his
contractual obligations, awarding TapImmune $196,204 in damages. Gardner's counterclaims
were denied. The award was later confirmed by the U.S. District Court for the Southern District
of New York. The International Arbitration Tribunal decided in favor of TapImmune, Inc.

This extract is taken from TapImmune, Inc. v Michael Gardner ICDR Case No. 50-20-1300-0061.

32 & 33: Although "proof of actual bias is not required" and "partiality can be inferred from
objective facts inconsistent with impartiality," "a party seeking vacatur must prove evident
partiality by showing something more than the mere appearance of bias." Kolel Beth Yechiel
Mechil of Tartikov, Inc. v. YLL Irrevocable Trust, 729 F.3d 99, 104 (2d Cir. 2 2013) "A showing
of evident partiality must be direct and not speculative," and the party seeking vacatur "bear[s] a
high burden of demonstrating objective facts inconsistent with impartiality."
 12. R. v S. (R.D.), (1997) 3 S.C.R. 484.

FACTS: A Black youth (S.R.D.) was charged with assaulting a white police officer. The trial
judge, a Black woman, acquitted S.R.D., stating that racial bias could have influenced the officer’s
testimony. The Crown appealed, arguing the judge’s comments demonstrated a reasonable
apprehension of bias. The Supreme Court of Canada upheld the acquittal, ruling that a judge’s
lived experiences do not automatically create bias, provided decisions remain grounded in
evidence and law. The Supreme Court of Canada decided in favor of S.R.D.

This extract is taken from R. v S. (R.D.), (1997) 3 S.C.R. 484.

The apprehension of bias must be a reasonable one held by reasonable and right-minded persons,
applying themselves to the question and obtaining thereon the required information. The test is
what would an informed person, viewing the matter realistically and practically -- and having
thought the matter through -- conclude. This test contains a two-fold objective element: the person
considering the alleged bias must be reasonable and the apprehension of bias itself must also be
reasonable in the circumstances of the case. Further the reasonable person must be an informed
person, with knowledge of all the relevant circumstances, including the traditions of integrity and
impartiality that form a part of the background and apprised also of the fact that impartiality is one
of the duties the judges swear to uphold. The reasonable person should also be taken to be aware
of the social reality that forms the background to a particular case, such as societal awareness and
acknowledgement of the prevalence of racism or gender bias in a particular community. The
jurisprudence indicates that a real likelihood or probability of bias must be demonstrated and that
a mere suspicion is not enough. The existence of a reasonable apprehension of bias depends
entirely on the facts. The threshold for such a finding is high and the onus of demonstrating bias
lies with the person who is alleging its existence. The test applies equally to all judges, regardless
of their background, gender, race, ethnic origin, or any other characteristic.
The requirement for neutrality does not require judges to discount their life experiences. Whether
the use of references to social context is appropriate in the circumstances and whether a reasonable
apprehension of bias arises from particular statements depends on the facts. A very significant
difference exists between cases in which social context is used to ensure that the law evolves in
keeping with changes in social reality and cases, such as this one, where social context is
apparently being used to assist in determining an issue of credibility.

13. The King v Sussex Justices, (1924) 1 KB 256.

FACTS: A motorcyclist was convicted of reckless driving by a magistrates’ court. After the
conviction, it was discovered that the clerk advising the justices was a solicitor from a firm acting
in a civil case against the defendant. The defendant challenged the conviction, arguing there was
a risk of bias. The King’s Bench quashed the conviction, establishing the famous principle that
"justice must not only be done but must also be seen to be done." The King’s Bench Division
decided in favor of the Motorcyclist.

This extract is taken from The King v Sussex Justices, (1924) 1 KB 256.

It is clear that the deputy clerk was a member of the firm of solicitors engaged in the conduct of
proceedings for damages against the applicant in respect of the same collision as that which gave
rise to the charge that the justices were considering. It is said, and, no doubt, truly, that when that
gentleman retired in the usual way with the justices, taking with him the notes of the evidence in
case the justices might desire to consult him, the justices came to a conclusion without consulting
him, and that he scrupulously abstained from referring to the case in any way. But while that is so,
a long line of cases shows that it is not merely of some importance but is of fundamental
importance that justice should not only be done but should manifestly and undoubtedly be seen to
be done. The question therefore is not whether in this case the deputy clerk made any observation
or offered any criticism which he might not properly have made or offered; the question is whether
he was so related to the case in its civil aspect as to be unfit to act as clerk to the justices in the
criminal matter. The answer to that question depends not upon what actually was done but upon
what might appear to be done.

ISSUE II –

14. Uttarakhand Purv Sainik Kalyan Nigam Ltd. v Northern Coal Field Ltd, (2020) 2
SCC 455.
FACTS: A dispute arose over an arbitration clause in a contract for security services. The petitioner
challenged the appointment of the sole arbitrator, who was an employee of the respondent
company, arguing it violated the principles of impartiality under the Arbitration and Conciliation
Act, 1996. The Supreme Court held that the appointment was invalid due to potential bias and
reaffirmed the importance of neutral arbitrators. The Supreme Court decided in favor of
Uttarakhand Purv Sainik Kalyan Nigam Ltd.

This extract is taken from Uttarakhand Purv Sainik Kalyan Nigam Ltd. v Northern Coal Field Ltd,
(2020) 2 SCC 455.

7.10: In view of the legislative mandate contained in Section 11(6-A), the Court is now required
only to examine the existence of the arbitration agreed ment. All other preliminary or threshold
issues are left to be decided by the arbitrator under Section 16, which enshrines the kompetenz-
kompetenz

7.11: The doctrine of "kompetenz-kompetenz", also referred to as "compé-tence-compétence", or

"compétence de la recognized", implies that the Arbitral Tribunal is empowered and has the
competence to rule on its own juris-diction, including determining all jurisdictional issues, and the
existence or validity of the arbitration agreement. This doctrine is intended to minimise judicial
intervention, so that the arbitral process is not thwarted at the threshold, when a preliminary
objection is raised by one of the parties. The doctrine of kompetenz-kompetenz is, however,
subject to the exception i.e. when the arbitration agreement itself is impeached as being procured
by fraud or deception. This exception would also apply to cases where the parties in the process
of negotiation, may have entered into a draft agreement as an antecedent step prior to executing
the final contract.

15. Sukanya Holdings (P) Ltd. v Jayesh H. Pandya and Another, (2003) 5 SCC 531.

FACTS: A dispute arose involving both arbitrable and non-arbitrable issues in a company matter.
The petitioner sought to refer the entire dispute to arbitration under Section 8 of the Arbitration
and Conciliation Act, 1996. The Supreme Court held that arbitration cannot be compelled when
the dispute involves parties and issues beyond the arbitration agreement. The court emphasized
that bifurcation of proceedings was not permissible under Section 8. The Supreme Court of India
decided in favor of Jayesh H. Pandya.

This extract is taken from Sukanya Holdings (P) Ltd. v Jayesh H. Pandya and Another, (2003) 5
SCC 531.

16. The next question which requires consideration is — even if there is no provision for partly
referring the dispute to arbitration, whether such a course is possible under Section 8 of the Act.
In our view, it would be difficult to give an interpretation to Section 8 under which bifurcation of
the cause of action the subject-matter of the suit or in some cases bifurcation of the suit between
parties who are parties to the arbitration agreement and others is possible. This would be laying
down a totally new procedure not contemplated under the Act. If bifurcation of the subject-matter
of a suit was contemplated, the legislature would have used appropriate language to permit such a
course. Since there is no such indication in the language, it follows that bifurcation of the subject-
matter of an action brought before a judicial authority is not allowed

17. Secondly, such bifurcation of suit in two parts, one to be decided by the Arbitral Tribunal and
the other to be decided by the civil court would inevitably delay the proceedings. The whole
purpose of speedy disposal of dispute and decreasing the cost of litigation would be frustrated by
such procedure.

16. Vidya Drolia v Durga Trading Corporation, (2021) 2 SCC 1.

FACTS: A dispute arose over the arbitrability of tenancy matters under the Transfer of Property
Act. The Supreme Court ruled that landlord-tenant disputes governed by special statutes requiring
court intervention are non-arbitrable. It established a four-fold test to determine arbitrability,
focusing on rights in rem versus rights in personam. The judgment reaffirmed the kompetenz-
kompetenz principle, empowering arbitral tribunals to decide their own jurisdiction. The Supreme
Court decided in favor of Durga Trading Corporation.

This extract is taken from Vidya Drolia v Durga Trading Corporation, (2021) 2 SCC 1.
45.In view of the above discussion, we would like to propound a four- fold test for determining
when the subject matter of a dispute in an arbitration agreement is not arbitrable:

(1) when cause of action and subject matter of the dispute relates to actions in rem, that do not
pertain to subordinate rights in personam that arise from rights in rem.

(2) when cause of action and subject matter of the dispute affects third party rights; have erga
omnes effect; require centralized adjudication, and mutual adjudication would not be appropriate
and enforceable.

(3) when cause of action and subject matter of the dispute relates to inalienable sovereign and
public interest functions of the State and hence mutual adjudication would be unenforceable; and

(4) when the subject-matter of the dispute is expressly or by necessary implication non-arbitrable
as per mandatory statute(s).

These tests are not watertight compartments; they dovetail and overlap, albeit when applied
holistically and pragmatically will help and assist in determining and ascertaining with great
degree of certainty when as per law in India, a dispute or subject matter is non-arbitrable.

17. Ayyasamy v A. Paramasivam and Ors, (2016) 10 SCC 386.

FACTS: A dispute arose regarding the arbitrability of fraud allegations in a partnership dispute.
The petitioner sought arbitration, but the respondents contended that serious fraud allegations
required court adjudication. The Supreme Court held that mere allegations of fraud do not make a
dispute non-arbitrable unless they involve complex issues requiring detailed evidence. The court
distinguished between simple fraud, which can be arbitrated, and serious fraud, which courts must
decide. The Supreme Court of India decided in favor of Ayyasamy

This extract is taken from Ayyasamy v A. Paramasivam and Ors, (2016) 10 SCC 386.

25. In view of our aforesaid discussions, we are of the opinion that mere allegation of fraud
simplicitor may not be a ground to nullify the effect of arbitration agreement between the parties.
It is only in those cases where the Court, while dealing with Section 8 of the Act, finds that there
are very serious allegations of fraud which make a virtual case of criminal offence or where
allegations of fraud are so complicated that it becomes absolutely essential that such complex
issues can be decided only by civil court on the appreciation of the voluminous evidence that needs
to be produced, the Court can sidetrack the agreement by dismissing application under Section 8
and proceed with the suit on merits. It can be so done also in those cases where there are serious
allegations of forgery/fabrication of documents in support of the plea of fraud or where fraud is
alleged against the arbitration provision itself or is of such a nature that permeates the entire
contract, including the agreement to arbitrate, meaning thereby in those cases where fraud goes to
the validity of the contract itself of the entire contract which contains the arbitration clause or the
validity of the arbitration clause itself. Reverse position thereof would be that where there are
simple allegations of fraud touching upon the internal affairs of the party inter se and it has no
implication in the public domain, the arbitration clause need not be avoided and the parties can be
relegated to arbitration. While dealing with such an issue in an application under Section 8 of the
Act, the focus of the Court has to be on the question as to whether jurisdiction of the Court has
been ousted instead of focusing on the issue as to whether the Court has jurisdiction or not. It has
to be kept in mind that insofar as the statutory scheme of the Act is concerned, it does not
specifically exclude any category of cases as non- arbitrable. Such categories of non-arbitrable
subjects are carved out by the Courts, keeping in mind the principle of common law that certain
disputes which are of public nature, etc. are not capable of adjudication and settlement by
arbitration and for resolution of such disputes, Courts, i.e. public fora, are better suited than a
private forum of arbitration. Therefore, the inquiry of the Court, while dealing with an application
under Section 8 of the Act, should be on the aforesaid aspect, viz. whether the nature of dispute is
such that it cannot be referred to arbitration, even if there is an arbitration agreement between the
parties. When the case of fraud is set up by one of the parties and on that basis that party wants to
wriggle out of that arbitration agreement, a strict and meticulous inquiry into the allegations of
fraud is needed and only when the Court is satisfied that the allegations are of serious and
complicated nature that it would be more appropriate for the Court to deal with the subject matter
rather than relegating the parties to arbitration, then alone such an application under Section 8
should be rejected.

18. Rashid Raza v Sadaf Khan, (2019) 8 SCC 710.

FACTS: A dispute arose in a partnership where allegations of fraud were made. The respondent
argued that the fraud claims made the dispute non-arbitrable, while the petitioner sought arbitration
under the partnership agreement. The Supreme Court applied the Ayyasamy test, distinguishing
between simple and serious fraud. It held that allegations of fraud affecting only the parties’
internal affairs (and not the public domain) remain arbitrable. The Supreme Court of India decided
in favor of Rashid Raza.

This extract is taken from Rashid Raza v Sadaf Khan, (2019) 8 SCC 710.

The principles of law laid down in this appeal make a distinction between serious allegations of
forgery/fabrication in support of the plea of fraud as opposed to “simple allegations”. Two working
tests laid down in paragraph 25 are: (1) does this plea permeate the entire contract and above all,
the agreement of arbitration, rendering it void, or (2) whether the allegations of fraud touch upon
the internal affairs of the parties inter se having no implication in the public domain. Judged by
these two tests, it is clear that this is a case which falls on the side of “simple allegations” as there
is no allegation of fraud which would vitiate the partnership deed as a whole or, in particular, the
arbitration clause concerned in the said deed. Secondly, all the allegations made which have been
relied upon by the learned counsel appearing on behalf of the respondent, pertain to the affairs of
the partnership and siphoning of funds therefrom and not to any matter in the public domain. This
being the case, we are of the view that the disputes raised between the parties are arbitrable and,
hence, a Section 11 application under the Arbitration Act would be maintainable.

ISSUE 3:

19. Suisse Atlantique Societe d'Armament SA v NV Rotterdamsche Kolen Centrale,

(1967) 1 A.C. 361.

FACTS: A dispute arose over a charterparty contract where the shipowner claimed damages for
delays in cargo loading and unloading. The contract contained a limitation clause restricting
liability to demurrage payments. The shipowner argued that the charterer’s persistent breaches
nullified the limitation clause. The House of Lords held that such clauses should be interpreted
based on the contract's intent and commercial reasonableness, refusing to invalidate it. The House
of Lords decided in favor of NV Rotterdamsche Kolen Centrale.
This extract is taken from Suisse Atlantique Societe d'Armament SA v NV Rotterdamsche Kolen
Centrale, (1967) 1 A.C. 361.

The expression, “fundamental term” appears to mean no more than a condition, a stipulation which
the parties have agreed (expressly or impliedly) to be , or which the general law regards as, a term
which goes to the root of the contract so that any breach of that term may at once and without
further reference to the facts and circumstances be regards by the innocent party as justifying
discharge

20. Ghaziabad Development Authority v Union of India, (2000) 6 SCC 113.

FACTS: The dispute arose from the delay in allotment of plots by the Ghaziabad Development
Authority (GDA). The allottees sought compensation for mental agony and financial loss due to
the delay. The Supreme Court held that statutory authorities like GDA are liable for deficiency in
service and must compensate affected parties. It reaffirmed that consumer forums have jurisdiction
over such matters despite contractual provisions. The Supreme Court of India decided in favor of
Union Of India.

This extract is taken from Ghaziabad Development Authority v Union of India, (2000) 6 SCC 113.

When a Development Authority announces a scheme for allotment of plots, the brochure issued
by it for public information is an invitation to offer. Several members of the public may make
applications for availing benefit of the scheme. Such applications are offers. Some of the offers
having been accepted subject to rules of priority or preference laid down by the Authority result
in a contract between the applicant and the Authority. The legal relationship governing the
performance and consequences flowing from breach would be worked out under the provisions of
the Contract Act and the Specific Relief Act except to the extent governed by the law applicable
to the Authority floating the scheme. In case of breach of contract damages may be claimed by
one party from the other who has broken its contractual obligation in some way or the other. The
damages may be liquidated or unliquidated. Liquidated damages are such damages as have been
agreed upon and fixed by the parties in anticipation of the breach. Unliquidated damages are such
damages as are required to be assessed. Broadly the principle underlying assessment of damages
is to put the aggrieved party monetarily in the same position as far as possible in which it would
have been if the contract would have been performed. Here the rule as to remoteness of damages
comes into play. Such loss may be compensated as the parties could have contemplated at the time
of entering into the contract. The party held to compensation shall be obliged to compensate for
such losses as directly flow from its breach.

21. British Movietonews Ltd., v London and District Cinemas, (1952) A.C.166.

FACTS: A dispute arose over a contract granting exclusive rights to exhibit newsreels. The
defendant cinema chain argued that the contract was too uncertain to be enforceable. The House
of Lords held that a contract is binding if its terms are sufficiently clear, even if some details
require future determination. The ruling emphasized that commercial agreements should be upheld
unless fundamental uncertainties exist. The House of Lords decided in favor of British
Movietonews Ltd.

This extract is taken from British Movietonews Ltd., v London and District Cinemas, (1952)
A.C.166.

“The parties to an executory contract are often faced, in the course of earning it out, with a turn of
events which they did not at all anticipate. Yet this does not of itself affect the bargain they have
made. If, on the other hand, a consideration of the terms of the contract, in the light of the
circumstances existing when it was made, shows that they never agreed to be bound in a
fundamentally different situation which has now unexpectedly emerged, the contract ceases to
bind at that point — not because the court in its discretion thinks it just and reasonable to qualify
the terms of the contract, but because of its true construction it does not apply in that situation.”

ISSUE 4:

22. M. Lachia Setty & Sons Ltd. Etc. v The Coffee Board, Bangalore, (1980) 4 SCC 636.

FACTS: A dispute arose regarding the Coffee Board's cancellation of an auction contract for the
sale of coffee. The appellant claimed damages, arguing that the cancellation was arbitrary and
unlawful. The Supreme Court held that the Coffee Board, a statutory body, must act fairly and in
accordance with contractual obligations. However, it ruled that contracts entered into by the
government in a purely commercial capacity are governed by ordinary contract law principles. The
Supreme Court of India decided in favor of The Coffee Board.

This extract is taken from M. Lachia Setty & Sons Ltd. Etc. v The Coffee Board, Bangalore, (1980)
4 SCC 636.

14. The general doctrine of avoidable consequences applies to the measure of damages in actions
for breach of contract. Thus, the damages awarded to the non-defaulting party to a contract will be
determined and measured as though that party had made reasonable efforts to avoid the losses
resulting from the default. Some courts have stated this doctrine in terms of a duty owing by the
innocent party to the one in default; that is, that the person who is seeking damages for breach of
contract has a duty to minimise those damages. However, on analysis, it is clear that in contract
cases as well as generally, there is no duty to minimise damages, because no one has a right of
action against the non-defaulting party if he does not reasonably amid certain consequences arising
from the de-fault. Such a failure does not make the non-defaulting party liable to suit; it only
indicates that the damages actually suffered are greater than the law will compensate. Therefore,
in contract actions, the doctrine of avoidable consequences is only a statement about how damages
will be measured,"
23. Murlidhar Chiranjilal v M/s. Harishchandra Dwarkadas & Anr, AIR 1962 SC 366.

FACTS: A dispute arose over a breach of contract for the sale of goods. The buyer failed to take
delivery, and the seller sued for damages based on market price fluctuations. The Supreme Court
held that damages must be assessed based on the difference between the contract price and market
price at the time of breach, following the principle of compensatory damages. The court
emphasized that speculative losses or remote damages cannot be claimed. The Supreme Court of
India decided in favor of M/s. Harishchandra Dwarkadas.

This extract is taken from Murlidhar Chiranjilal v M/s. Harishchandra Dwarkadas & Anr, AIR
1962 SC 366.

9. The two principles on which damages in such cases are calculated are well-settled. The first is
that, as far as possible, he who has proved a breach of a bargain to supply what he contracted to
get is to be placed, as far as money can do it, in as good a situation as if the contract had been
performed; but this principle is qualified by a second, which imposes on a plaintiff the duty of
taking all reasonable steps to mitigate the loss consequent on the breach, and debars him from
claiming any part of the damage which is due to his neglect to take such stepsThese two principles
also follow from the law as laid down in Section 73 read with the Explanation thereof. If therefore
the contract was to be performed at Kanpur it was the respondent's duty to buy the goods in Kanpur
and rail them to Calcutta on the date of the breach and if it suffered any damage thereby because
of the rise in price on the date of the breach as compared to the contract price, it would be entitled
to be re-imbursed for the loss. Even if the respondent did not actually buy them in the market at
Kanpur on the date of breach it would be entitled to damages on proof of the rate for similar canvas
prevalent in Kanpur on the date of breach, if that rate resulting in loss to it. However, the
respondent did not make any attempt to prove the rate for similar canvas prevalent in Kanpur on
the date of breach. Therefore, it would obviously be not entitled to any damages at all, for on this
state of the evidence it could not be said that any damage naturally arose in the usual course of
things.
24. British Westinghouse Electric and Mfg. Co. Ltd. v Underground Electric Rlys. Co. of
London Ltd., (1912) AC 673.

FACTS: A dispute arose over defective turbines supplied under a contract. The buyer replaced
them with more efficient turbines, leading to substantial cost savings. The seller argued that these
savings should reduce the damages payable. The House of Lords held that while a claimant must
mitigate losses, benefits arising from mitigation are only deducted if they directly stem from the
breach. The House of Lords decided in favor of Underground Electric Railways Co.

This extract is taken from British Westinghouse Electric and Mfg. Co. Ltd. v Underground Electric
Rlys. Co. of London Ltd., (1912) AC 673.

In order to come to a conclusion on the question as to damages thus raised, it is essential to bear
in mind certain propositions which I think are well established. In some of the cases there are
expressions as to the principles governing the measure of general damages which at first sight
seem difficult to harmonize. The apparent discrepancies are, however, mainly due to the varying
nature of the particular questions submitted for decision. The quantum of damage is a question of
fact, and the only guidance which the law can give is to lay down general principles, which afford
at times but scanty assistance in dealing with particular cases. The judges who give guidance to
juries in these cases have necessarily to look at their special character, and to mould for the
purposes of different kinds of claim the expression of the general principles which apply to them,
and this is apt to give rise to an appearance of ambiguity.
Subject to these observations, I think that there are certain broad principles which are quite well
settled. The first is that, as far as possible, he who has proved a breach of a bargain to supply what
he contracted to get is to be placed, as far as money can do it, in as good a situation as if the contract
had been performed.
The fundamental basis is thus compensation for pecuniary loss naturally flowing from the breach;
but this first principle is qualified by a second, which imposes on a plaintiff the duty of taking all
reasonable steps to mitigate the loss consequent on the breach, and debars him from claiming any
part of the damage which is due to his neglect to take such steps. In the words of James, L.J., in
As James, L.J., indicates, this second principle does not impose on the plaintiff an obligation to
take any step which a reasonable and prudent man would not ordinarily take in the course of his
business. But when in the course of his business he has taken action arising out of the transaction,
which action has diminished his loss, the effect in actual diminution of the loss which he has
suffered may be taken into account even though there was no duty on him to act.

25. Transfield Shipping Inc v Mercator Shipping Inc, (2008) UKHL 48.

FACTS: A dispute arose over late redelivery of a chartered ship, causing the owner to lose a
lucrative follow-on contract. The owner claimed damages for lost profits, while the charterer
argued liability should be limited to the market rate difference for the delay period. The House of
Lords ruled that damages must be based on what parties reasonably contemplated at contract
formation, rejecting liability for unforeseeable losses. This case refined the Hadley v. Baxendale
test, emphasizing commercial predictability in contract damages. It introduced the concept of
“assumption of responsibility” in remoteness of damages. The House of Lords decided in favor of
Mercator Shipping Inc.

This extract is taken from Transfield Shipping Inc v Mercator Shipping Inc, (2008) UKHL 48.
Assumption of responsibility, which forms the basis of the law of remoteness of damage in
contract, is determined by more than what at the time of the contract was reasonably foreseeable.
It is important to bear in mind that, as Lord Reid pointed out in The Heron II [1969] 1 AC 350,
385, the rule that applies in tort is quite different and imposes a much wider liability than that
which applies in contract. The defendant in tort will be liable for any type of loss and damage
which is reasonably foreseeable as likely to result from the act or omission for which he is held
liable. Reasonable foreseeability is the criterion by which the extent of that liability is to be judged,
and it may result in his having to pay for something that, although reasonably foreseeable, was
very unusual, not likely to occur and much greater in amount than he could have anticipated. In
contract it is different and, said Lord Reid, at p 386, there is good reason for the difference:

“In contract, if one party wishes to protect himself against a risk which to the other party would
appear unusual, he can direct the other party’s attention to it before the contract is made, and I
need not stop to consider in what circumstances the other party will then be held to have accepted
responsibility in that event.”

26. Hadley v Baxendale, (1854) All ER Rep. 461.

FACTS: The plaintiff, Hadley, operated a mill and hired Baxendale to transport a broken mill shaft
for repair. Due to Baxendale's delay in delivery, Hadley lost profits as the mill could not operate.
The court held that the defendant could only be liable for losses that were foreseeable at the time
the contract was made. This case established the Hadley v. Baxendale rule, which states that
damages for breach of contract are limited to those that arise naturally from the breach or were
contemplated by both parties at contract formation. The Court of Exchequer decided in favor of
Baxendale.

This extract is taken from Hadley v Baxendale, (1854) All ER Rep. 461.

Where two parties have made a contract which one of them has broken, the damages which the
other party ought to receive in respect of such breach of contract should be such as may fairly and
reasonably be considered either arising naturally, i.e., according to the usual course of things, from
such breach of contract itself, or such as may reasonably be supposed to have been in the
contemplation of both parties, at the time they made the contract, as the probable result of the
breach of it. Now, if the special circumstances under which the contract was actually made where
communicated by the plaintiffs to the defendants, and thus known to both parties, the damages
resulting from the breach of such a contract, which they would reasonably contemplate, would be
the amount of injury which would ordinarily follow from a breach of contract under these special
circumstances so known and communicated. But, on the other hand, if these special circumstances
were wholly unknown to the party breaking the contract, he, at the most, could only be supposed
to have had in his contemplation the amount of injury which would arise generally, and in the great
multitude of cases not affected by any special circumstances, from such a breach of contract. For
such loss would neither have flowed naturally from the breach of this contract in the great
multitude of such cases occurring under ordinary circumstances, nor were the special
circumstances, which, perhaps, would have made it a reasonable and natural consequence of such
breach of contract, communicated to or known by the defendant.

ISSUE 5:

27. Gomathinayagam Pillai and Ors. v Pallaniswami Nadar, AIR 1967 SC 868.

FACTS: The dispute centered around the interpretation of a will and the legitimacy of certain
bequests. The testator’s will be contested by family members who claimed that the will was invalid
due to improper execution. The Supreme Court upheld the will, emphasizing that once a will is
properly executed, it stands unless there is clear evidence of fraud or undue influence. The case
reinforced the importance of upholding the testator’s intentions in will disputes. The Supreme
Court of India decided in favor of Pallaniswami Nadar.

This extract is taken from Gomathinayagam Pillai and Ors. v Pallaniswami Nadar, AIR 1967 SC
868.

4. It is not merely because of specification of time at or before which the thing to be done under
the contract is promised to be done and default in compliance therewith, that the other party may
avoid the contract. Such an option arises only if it is intended by the parties that time is of the
essence of the contract.Intention to make time of the essence, if expressed in writing, must be in
language which is unmistakable: it may also be inferred from the nature of the property agreed to
be sold, conduct of the parties and the surrounding circumstances at or before the contract. Specific
performance of a contract will ordinarily be granted, notwithstanding default in carrying out the
contract within the specified period, if having regard to the express stipulations of the parties,
nature of the property and the surrounding circumstances, it is not inequitable to grant the relief.
If the contract relates to sale of immovable property, it would normally be presumed that time was
not of the essence of the contract. Mere incorporation in the written agreement of a clause imposing
penalty in case of default does not by itself evidence an intention to make time of the essence.
28. Oil & Natural Gas Corporation Limited v. M/s. Soconord OCTG, (2014) SCC OnLine
Bom 1277.

FACTS: The dispute involved a contract for the supply of equipment and services between ONGC
and Soconord. Soconord sought to enforce an arbitration clause after ONGC allegedly failed to
pay for the supplied goods. ONGC contested the claim, arguing that the dispute was not arbitrable.
The Bombay High Court upheld the arbitration clause, ruling that contractual disputes between the
parties should be resolved through arbitration. The Bombay High Court decided in favor of
Soconord OCTG.

This extract is taken from Oil & Natural Gas Corporation Limited v. M/s. Soconord OCTG, (2014)
SCC OnLine Bom 1277.

10. Clauses 5.1 and 5.2 of the contract and clause 14 of the GCSC expressly provide that time is
of the essence of the contract and the failure to complete delivery by the scheduled date would
entail the levy of liquidated damages.
11. The learned Umpire, after construing the terms and conditions of the contract, the conduct of
the parties and the law, including the judgment of the Supreme Court in Hind Construction
Contractors v. State of Maharashtra, AIR 1979 SC 720, came to the conclusion that the other
clauses in the contract did not in any manner detract from or exclude the express provision
of the contract of time being of the essence. The Umpire rejected the contention on behalf of
Soconord that in view of the other provisions of the contract viz. Clause 13.3.1 and clause 11 of
the GCSC, time was not actually of the essence of the contract. The learned Umpire, after
considering the judgment of the Supreme Court, held that the question is really one of the intention
of the parties which must be gathered from all the relevant provisions of the contract, the conduct
of the parties and the surrounding circumstances.
12. The Umpire after considering the documentary evidence and the conduct of the parties came
to the conclusion that the express provisions of time being of the essence of the contract could not
be displaced even in view of the facts of the case. The Umpire did not hold time to be of the essence
of the contract only on the basis of the provisions to that effect in clause 5 of the main contract and
clause 14 of the GCSC. Applying the ratio of the judgment in Hind Construction Contractors v.
State of Maharashtra, he arrived at this conclusion after considering all the relevant factors.
13.The learned Umpire construed the entire contract, the correspondence between the parties and
the conduct of the parties before coming to the conclusion that time was of the essence of the
contract and the express conditions to that effect in the contract were not displaced as contended
by Soconord.

29. ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705.

FACTS: ONGC entered into a contract with Saw Pipes for the supply of pipes, but the latter failed
to deliver according to the agreed specifications. ONGC sought damages for breach of contract,
while Saw Pipes argued that the claim was exaggerated. The Supreme Court upheld ONGC's claim
and emphasized that an arbitrator can award damages for both actual losses and loss of profits if
they are foreseeable. The case clarified that arbitral tribunals have the authority to grant
consequential and incidental damages in contractual disputes. The Supreme Court of India decided
in favor of ONGC Ltd.

This extract is taken from ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705.

67. Take for illustration construction of a road or a bridge. If there is delay in completing the
construction of road or bridge within the stipulated time, then it would be difficult to prove how
much loss is suffered by the society/State. Similarly, in the present case, delay took place in
deployment of rigs and on that basis actual production of gas from platform B-121 had to be
changed. It is undoubtedly true that the witness has stated that redeployment plan was made
keeping in mind several constraints including shortage of casing pipes. The Arbitral Tribunal,
therefore, took into consideration the aforesaid statement volunteered by the witness that shortage
of casing pipes was only one of the several reasons and not the only reason which led to change in
deployment of plan or redeployment of rigs Trident Il platform B In our view, in such a contract,
it would be difficult to prove exact loss or damage which the parties suffer because of the breach
thereof. In such a situation if the parties have pre-estimated such loss after clear understanding, it
would be totally unjustified to arrive at the conclusion that the party who has committed breach of
the contract is not liable to pay compensation would be against the specific provisions of Sections
73 and 74 of the Indian Contract Act. There was nothing on record that compensation contemplated
by the parties was in any way unreasonable. It has been specifically mentioned that it was an agreed
genuine pre-estimate of damages duly agreed by the parties. It was also mentioned that the
liquidated damages are not by way of penalty. It was also provided in the contract that such
damages are to be recovered by the purchaser from the bills for payment of the cost of material
submitted by the contractor. No evidence is led by the claimant to establish that the stipulated
condition was by way of penalty or the compensation contemplated was, in any way, unreasonable.
There was no reason for the Tribunal not to rely upon the clear and unambiguous terms of
agreement stipulating pre-estimate damages because of delay in supply of goods.
Further, while extending the time for delivery of the goods, the respondent was informed that it
would be required to pay stipulated damages.