In Brief
ONGC invited bids for seamless steel casing pipes, awarded to Remi Metals. Delivery delays occurred; ONGC deducted liquidated damages. The dispute concerned whether time was "of the essence" in the contract. The Arbitral Tribunal held time was not essential (given extension provisions) and awarded actual damages instead of liquidated damages. The District Court upheld this. The High Court reversed, allowing liquidated damages. The Supreme Court upheld the Tribunal's award. The Court held that whether time is essential must be determined by reading the entire contract and circumstances, not merely explicit clauses. Provisions for extensions and waived liquidated damages indicated time was not essential; therefore, actual loss—not pre-estimated damages—was recoverable.
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