Consolidated Construction Consortium Limited Vs Software Technology Parks of India (Supreme Court of India)
Summary: The Supreme Court dismissed the appeal filed by Consolidated Construction Consortium Limited against the judgment of the Madras High Court, which had restored an arbitral award upholding deduction of liquidated damages by Software Technology Parks of India (STPI).
STPI had awarded the appellant a construction contract for an office building, incubation centre and related works at a total project cost of Rs. 16,48,69,970.00. The scheduled completion date was 15.01.2007, whereas the appellant completed the construction on 30.11.2007, resulting in a delay of about ten months. After completion and handing over of the project, the appellant claimed Rs. 1,40,12,786.00 including retention money and interest. STPI deducted Rs. 82,43,499.00 towards liquidated damages under clause 26 of the contract, besides making other deductions, and paid the balance amount of Rs. 3,70,992.00.
The appellant invoked arbitration challenging the deduction and raised other claims, while STPI raised counter claims. The sole arbitrator, by award dated 10.05.2010, upheld the deduction of liquidated damages and rejected the other claims and counter claims, ultimately declaring the award as nil against all claims and counter claims.
The appellant challenged the arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996. The learned Single Judge of the Madras High Court held that there had been an extension of the work period and that the appellant had completed the work during the extended period. Consequently, the Single Judge held that deduction of liquidated damages was not justified and set aside the arbitral award on 02.01.2019.
