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Union of India vs. Swadeshi Civil Infrastructure Pvt. Ltd.

Original Miscellaneous Petition (Commercial) · 2026:DHC:9040Decided 12 Oct 2026New Delhi Bench
O.M.P. (COMM) 563/2025CNR: DLHC011071832025
Justice Manoj Jain

Background

Union of India had engaged a contractor to build 76 multi-storied flats in Delhi for Members of Parliament. After the work was completed, an arbitral tribunal awarded the contractor a bonus for early completion, interest on one of the claims, and GST reimbursement. The Union of India challenged three parts of this award in the High Court, arguing the tribunal had misread the contract.

Decision Breakdown

The Court upheld the bonus award, holding that a contractual clause excluding certain delay-extension grounds from bonus eligibility only barred the contractor from claiming "damages" for those delays, not from earning the bonus if the project still finished ahead of schedule. It also declined to interfere with the tribunal's GST-reimbursement direction, since it merely required reimbursement where GST was actually payable. However, it set aside the interest awarded on a separate claim because the contractor had never actually asked for interest on that specific claim, making that part of the award legally invalid and severable from the rest.

Lesson Learnt

Courts give arbitral tribunals wide latitude to interpret contract clauses and will not act as an appellate forum over their reasoning, but an award can still be partly struck down if it grants relief that was never actually claimed by a party.

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