In Brief
In this civil appeal, the Supreme Court examined whether an arbitral award granting Rs. 1,57,37,666 for loss of overheads and profits to a contractor was sustainable. The contractor claimed damages due to employer-caused delays in a sewage treatment plant project. The Court found the award fatally flawed: the arbitrator provided no reasoning for computation, applied no recognized damage formula, and awarded compensation that amounted to double or overlapping payments. The Court held that arbitral awards violating fundamental policy of Indian law—through lack of reasoned judgment, perverse conclusions, or grossly disproportionate damages—can be set aside under Section 34 of the Arbitration Act. The appeal was dismissed, upholding the High Court's decision to set aside the award.
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