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Indian Laws - Highlights / Catch Notes

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The court dismissed the appeal against the arbitrator's decision ...


Appeal against arbitrator's decision on liquidated damages dismissed. Legal injury must be proved for both types of damages.

Case Laws     Indian Laws

July 26, 2024

The court dismissed the appeal against the arbitrator's decision not to levy liquidated damages due to the failure to plead and demonstrate legal injury. The court held that liquidated damages are no different from unliquidated damages, and in both cases, the aggrieved party must demonstrate legal injury. Liquidated damages represent the maximum amount payable, but u/s 74 of the Contract Act, reasonable compensation must be paid. Since there were no pleadings regarding the imposition of liquidated damages, no leave could be granted at the second stage of scrutiny. The appeal was dismissed, and costs were quantified at Rs. 20,000/-.

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