In Brief
A construction company contracted to build a complex for Software Technology Parks but completed the work ten months late. The employer deducted Rs. 82.43 crore in liquidated damages. The arbitrator upheld the deduction despite the employer having granted time extensions, as each extension was granted with express notice that the right to levy damages was reserved. The High Court's single judge set aside the award, reasoning that extension of time precludes damages. The Supreme Court reversed this decision, holding that a court cannot substitute its view for a plausible arbitral interpretation. Since the employer had clearly reserved its right to levy damages when granting extensions, the damages were validly imposed and could not be disturbed.
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