LegalAware
LegalAware.ai
EMPOWERING LEGAL AWARENESS

M/S Unibros vs All India Radio

Not available · 2023 INSC 931Decided 19 Oct 2023
Not available
S. Ravindra Bhat · Dipankar Datta

Background

Unibros, a contractor, was awarded a construction contract by All India Radio for a building in Delhi that was supposed to finish in 12 months but was delayed by about 42.5 months due to the respondent's fault. An Arbitrator twice awarded Unibros roughly Rs. 1.44 crore for "loss of profit" during the delay period, calculated using Hudson's formula, but the Delhi High Court (both the Single Judge and the Division Bench) set aside this part of the award both times, finding that Unibros had produced no real evidence to prove it had actually lost profitable opportunities because of the delay. Unibros appealed to the Supreme Court, arguing that courts have very limited power to interfere with an arbitrator's factual findings and that Hudson's formula is a legally accepted method for calculating such losses.

Decision Breakdown

The Supreme Court held that while courts indeed have limited scope to interfere with arbitral awards, an award based on no evidence at all is "patently illegal" and conflicts with the fundamental public policy of India, which is a valid ground to set it aside under Section 34 of the Arbitration and Conciliation Act. The Court clarified that a claim for loss of profit due to delay requires the claimant to prove, with credible independent evidence (such as other projects declined, tendering opportunities lost, or financial records), that it actually had a viable alternative opportunity to earn profit elsewhere: a bare formula like Hudson's estimates the amount of loss but cannot itself substitute for proof that a loss occurred. Since Unibros never produced such evidence in either round of arbitration, the Court upheld the setting aside of the loss-of-profit award and dismissed the appeal, though it waived the costs earlier imposed by the Single Judge.

Lesson Learnt

A contractor cannot recover damages for "loss of profit" from a delayed contract simply by applying a standard formula; they must independently prove, with real evidence, that they actually lost a specific profitable opportunity because their resources were tied up: an arbitral award granting such damages without any such proof can be struck down as legally unsustainable.

Official source (sci.gov.in)View Judgment (PDF)

More rulings in Arbitration & Commercial Law

Arbitration & Commercial LawSupreme Court of India

Modern Asset v. KNK Constructions Private Limited

The Supreme Court held that an arbitration clause survives termination of the underlying contract (the "doctrine of separability") and that, at the Section 11 reference stage, courts only check for the prima facie existence of an arbitration agreement: deeper questions about the effect of the resolution plan are for the arbitrator. It confirmed that while the IBC's "clean slate" principle extinguishes creditors' claims against the insolvent company once a resolution plan is approved, it does not extinguish the claims the company itself (through its SRA) may have against its own debtors, since the Resolution Professional had not raised a counter-claim on KNK's behalf during the insolvency process. However, noting the inequity of letting KNK recover fresh dues on the same contract while Modern Asset's own claim had been wiped out to 0.72 %, and following its own recent precedent in Ujaas Energy, the Court modified the High Court's order: Modern Asset may raise its extinguished claim in the arbitration solely as a set-off against any amount it is found to owe KNK, but cannot use it to claim any fresh recovery.

Decided 8 Oct 2026Read case
Arbitration & Commercial LawDelhi High Court

S And P Infrastructure Developers (Pvt) Ltd vs. National Highways Authority of India

The Court held that the Joint Registrar's order overlooked an earlier ruling of this Court (M/s URC Construction (P) Ltd. v. Airports Authority of India) establishing that an instrument must be stamped at or before execution, with any delay attracting penalty, not just a top-up payment. Since the Joint Registrar's order was not in line with the Indian Stamp Act, 1899, the Court set it aside. The decree holder's counsel then sought to withdraw the petition with liberty to refile once the stamp duty issue was properly resolved, which the Court granted.

Decided 8 Oct 2026Read case
Arbitration & Commercial LawSupreme Court of India

Shubham Equipment Private Limited & Anr. v. Rothwell Water Company Limited & Ors.

The Supreme Court held that the Licence Agreement, the JVA, and the MoU each covered different subject matter (technology licensing, the joint venture company, and logistics services respectively), so the JVA and MoU's own arbitration clauses, providing for arbitration in Mumbai under Indian law, governed the disputes arising under them, not the Licence Agreement's Korea clause. Both agreements also contained "entire agreement" clauses showing they were meant to stand independently. The Court restricted itself to the limited inquiry required at the reference stage under Section 11(6-A), whether an arbitration agreement prima facie exists, and left deeper questions, including whether a non-signatory subsidiary (RBIPL) could be bound, to the arbitrator. It allowed the petitions and appointed a former Chief Justice of the Bombay High Court as the sole arbitrator.

Decided 8 Oct 2026Read case
Arbitration & Commercial LawDelhi High Court

M/S Redcliffe Lifetech Pvt Ltd vs. Connect and Heal Primary Care Pvt. Ltd.

Since the dispute was resolved, the petitioner's counsel sought leave to withdraw the petition rather than continue with it. The Court granted leave and dismissed the petition as withdrawn, along with any pending applications.

Decided 7 Oct 2026Read case
Arbitration & Commercial LawDelhi High Court

M/S Redcliffe Lifetech Pvt. Ltd. vs. Lifespan Wellness Private Limited

The Court reiterated that at the stage of appointing an arbitrator under Section 11, it need only check whether an arbitration agreement exists on its face, not decide the merits of the dispute. Finding the arbitration clause undisputed, the Court appointed a named advocate as sole arbitrator under the aegis of the Delhi International Arbitration Centre (DIAC), leaving all other objections (including arbitrability and jurisdiction) to be decided by the arbitrator.

Decided 7 Oct 2026Read case
Arbitration & Commercial LawDelhi High Court

M/S. Keshari Multi Functional Complex Pvt Ltd vs. Rail Land Development Authority

Because the awarded amount was already deposited pursuant to the earlier stay order, the Court held nothing further survived for consideration in the present enforcement petition. It disposed of the petition, giving the decree holder liberty to refile later after paying the proper stamp duty (and any penalty) under the Indian Stamp Act, 1899.

Decided 7 Oct 2026Read case