The High Court of Delhi upheld an arbitral tribunal award directing the Delhi Development Authority to pay twelve percent commercial interest alongside contractual damages to Simplex Infrastructure Limited over prolonged execution delays in a major municipal housing project. Dismissing a challenge filed by the statutory urban authority under Section 34 of the Arbitration and Conciliation Act, the court held that the arbitrator’s award was reasoned and balanced.
The commercial dispute originated from contractual delays in handing over encumbrance-free project sites and delayed design approvals, which prevented the engineering contractor from completing structural construction within scheduled deadlines. The DDA had argued that contractual extension clauses precluded the contractor from claiming additional overheads and interest penalties for extended site establishment durations.
The high court rejected the municipal authority’s arguments, ruling that contractual extension provisions do not automatically extinguish an arbitral tribunal’s statutory jurisdiction to award reasonable compensatory interest for demonstrable administrative delays. Infrastructure legal experts noted that the judgment reinforces judicial deference to arbitral awards in complex engineering construction contracts.
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Sources:
Delhi Development Authority Vs. Simplex Infrastructure Ltd. – Delhi High Court