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Eco Green Buildtech Pvt Ltd vs. Vikartan Infrastructure Pvt Ltd

Original Miscellaneous Petition (Commercial) · 2026:DHC:7702Decided 10 Sept 2026New Delhi Bench
O.M.P. (COMM) 293/2023CNR: DLHC010300652023
Justice Avneesh Jhingan

Background

A construction contract for a Greater Noida housing project ("Sikka Kamya Greens") ran into delay and payment disputes between the developer (petitioner) and the contractor (respondent). After arbitration, the sole arbitrator held the developer responsible for the delay and awarded the contractor money for work executed, tax refunds, idle machinery, overheads, material left at site, and loss of profit, while rejecting the developer's counterclaims. The developer challenged this award in court.

Decision Breakdown

The Court set aside most of the awarded claims as "patently illegal" because the arbitrator relied on his own personal experience and guesswork instead of actual evidence: for example, quantifying overhead and profit-loss damages using percentages drawn from his own trade knowledge rather than proof of real expenses, and awarding compensation for idle machinery without any rent receipts. The Court also found that figures discussed during a failed conciliation attempt between the parties had improperly been used later in the arbitration, and that the developer was never given a fair chance to contest a Local Commissioner's report before it was relied on. Only the claim for refund of an unpaid tax deduction (WCT) was left standing, since that was undisputed and well-supported.

Lesson Learnt

An arbitrator cannot substitute their own personal experience or "trade practice" for actual proof when awarding damages: Indian contract law requires a party claiming loss to prove the loss really happened and its amount, not just assert it.

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