Titiksha Chhabra, UPES, Dehradun
CIVIL APPEAL NO. 6834 OF 2021
ARISING OUT OF SLP (C) NO. 19203 OF 2012)
The case highlights the importance of contractual obligations and the conversational clarity that should be communicated between parties. A civil appeal was filed before the Hon’ble Supreme Court. The Appeal No: 2826-2827 in the year 2016 was filed. The respondent is Welspun Solutions Ltd. (formerly known as Remi Metals Gujarat Ltd.). The appellant in this case is Oil and Natural Gas Cooperation, who went to the Supreme Court. The ONGC was aggrieved by the decision of the Arbitral Tribunal. There were many issues raised during the hearing of the arbitral tribunal. Can Time be Considered as an Essence of the Contract, to make supplies under the Four Orders can the delivery date can be estimated as per the extension of the delivery of the supply orders. This case summary discusses the course of the judgement pronounced by the Hon’ble Apex Court. This case questions the very nature of the challenged judgement whether the Arbitral Tribunal was right in setting aside the Arbitration Award in favor of ONGC. The date and time of delivery specified by the ONGC as per the POs is considered as the essence of the supply order given. It must be completed within the timeline provided. The ONGC asked Remi Metals to pay for the liquidated damages. The dispute arises whether the competent authority should grant the right or remedy to recover damages for breach of contract. The provisions of the Contract as follows that if incase the contractor fails to deliver for any of such transaction that has to be incurred during the due course of time as per the contractual obligations is likely to be entitled to recover liquidated damages for the breach of contract. The recovery of liquidated damages as agreed by the contractor to pay a sum equivalent to 1/2% (half percent) of the contract price of the complete unit per week for the postponement in the delivery for the genuine and pre estimated amount mutually promised by the parties. The amount for the recovery of the liquidated damages of the 5% contract price of the whole contract price of the units ordered and the delivery period fixed was not adhered. The recovery will be initiated by the concerned paying authorities by the purchaser explained in the supply order in the bill for the payment of the cost of materials supplied by the contractor or his foreign suppliers in consonance with the Purchase Order.
