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DDA vs. M/S Swastic Construction Co

Original Miscellaneous Petition (Commercial) · 2026:DHC:7425Decided 2 Sept 2026New Delhi Bench
O.M.P. (COMM) 143/2016CNR: DLHC011239802016
Justice Om Prakash Shukla

Background

DDA challenged an arbitral award that had granted a road-construction contractor various amounts for work done beyond the original scope, price escalation during a delayed project, and money withheld pending an extension-of-time approval. DDA argued the arbitrator exceeded his authority and ignored contract terms, particularly on a claim for "prolongation" costs (extra staff/expenses due to the project overrunning its schedule) and quality-control-related withholding.

Decision Breakdown

The Court upheld most of the award, finding the arbitrator had taken a reasonable, evidence-based view of the contract on the final bill, extra concrete-cutting work, and escalation claims: disagreement over interpretation is not a ground to overturn an award. However, it struck down the "prolongation" damages award because the contractor's earlier no-claim undertaking wasn't proven to be coerced, the delay wasn't clearly attributed to DDA, and no real evidence (salary records, bills) supported the claimed monthly expense figure. It also struck down a smaller quality-control-related payment because the arbitrator hadn't properly addressed DDA's argument that this issue was excluded from arbitration by contract.

Lesson Learnt

Courts will generally respect an arbitrator's reasonable reading of a contract, but a damages claim, even a plausible one, still needs to be backed by real evidence of the loss actually suffered, not just an estimate based on what "should" have been spent.

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