Reimbursement of additional expenditure incurred due to an ...

Court Supports Reimbursement for Increased Costs Due to Higher Royalties and Taxes on Construction Materials.

May 9, 2024

Case Laws     Indian Laws     SC

Reimbursement of additional expenditure incurred due to an increase in the rates of royalty and associated sales tax on soil, sand and crushed stone aggregates - Arbitration Award - The Supreme Court upheld the Division Bench's decision, stating that any increase in tax through subsequent legislation is akin to the levy of additional royalty. The Court confirmed that the imposition of sales tax was indeed increased, and thus, the claim for reimbursement based on the increase was justified. The Court emphasized that such claims were covered by clause 70.8 of the agreement, and the Arbitral Tribunal's interpretation was consistent with previous legal precedents. Therefore, the appellant's challenge on this issue was dismissed. - The Court upheld the majority opinion of the Arbitral Tribunal regarding the construction of embankment work. It reiterated that the interpretation of contract terms primarily falls within the Arbitral Tribunal's jurisdiction.

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