Can Contractual Clauses Override Section 55 of the Indian Contract Act and specifically exclude damages for delay on the part of the employer while allowing extension as the only remedy to the contractor? Tune in to Episode #3 of Raising the Bar with Gaurav, to find out the answer.

𝐕𝐢𝐝𝐲𝐚 𝐃𝐫𝐨𝐥𝐢𝐚 𝐩𝐫𝐨𝐩𝐨𝐮𝐧𝐝𝐞𝐝 𝐭𝐡𝐞 𝐃𝐞𝐚𝐝𝐰𝐨𝐨𝐝 𝐄𝐱𝐜𝐞𝐩𝐭𝐢𝐨𝐧 𝐟𝐨𝐫 𝐫𝐞𝐟𝐞𝐫𝐞𝐧𝐜𝐞 𝐭𝐨 𝐚𝐫𝐛𝐢𝐭𝐫𝐚𝐭𝐢𝐨𝐧 𝐢𝐧 𝐒𝐞𝐜𝐭𝐢𝐨𝐧 11 𝐀𝐩𝐩𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧. 𝐈𝐬 𝐢𝐭 𝐬𝐭𝐢𝐥𝐥 𝐯𝐚𝐥𝐢𝐝 𝐥𝐚𝐰? 31.12.2015 – Arbitration Amendment 2015 receives assent of the President - Section 11(6A) inserted which stated that only the existence of arbitration clause to be seen at the time of reference of parties to Arbitration. The Amendment is deemed to come in force on 23.10.2015 09.08.2019 – Arbitration Amendment 2019 receives assent of the President. – Section 3 of the Amendment Act, deletes Section 11(6A). The provisions of the Amendment Act however are to come in force as per Central Government Notification Only. 30.08.2019 – Ministry of Law and Justice, Government of India notifies Sections 1, 4 – 9, 11-13 and 15. 12.10.2023 - Ministry of Law and Justice, Government of India notifies Section 10 of the 2019 Amendment. The deletion of Section 11(6A) by the 2019 amendment therefore was never notified. Section 11(6A) continues to remain on the statute book. However, the Hon’ble Supreme Court went on a deep dive in 𝐕𝐢𝐝𝐲𝐚 𝐃𝐫𝐨𝐥𝐢𝐚 𝐯. 𝐃𝐮𝐫𝐠𝐚 𝐓𝐫𝐚𝐝𝐢𝐧𝐠 𝐂𝐨𝐫𝐩𝐧., (2021) 2 𝐒𝐂𝐂 1 discussing the deletion of Section 11(6A). It committed a fundamental error in para 87 stating that the Amendment Act of 2019 came into effect on 09.08.2019. In paras 143 – 145 they have further gone to discuss whether the pre-2015 era of the law has come back due to the deletion of Section 11(6A). The Supreme Court in Vidya Drolia, however, held that irrespective of the deletion, existence of the arbitration agreement remains the only criteria for referring the parties to arbitration. While summarising their conclusions however, they also created the deadwood exception and stated that Rarely as a demurrer the court may interfere at Section 8 or 11 stage and conduct a limited review to protect parties from being forced to arbitrate when the matter is demonstrably “non-arbitrable” and to cut off the deadwood. Justice Sanjiv Khanna (who authored the Vidya Drolia Judgment) was also a part of the Bench in 𝐈𝐧𝐭𝐞𝐫𝐩𝐥𝐚𝐲 𝐁𝐞𝐭𝐰𝐞𝐞𝐧 𝐀𝐫𝐛𝐢𝐭𝐫𝐚𝐭𝐢𝐨𝐧 𝐀𝐠𝐫𝐞𝐞𝐦𝐞𝐧𝐭𝐬 𝐮𝐧𝐝𝐞𝐫 𝐀𝐫𝐛𝐢𝐭𝐫𝐚𝐭𝐢𝐨𝐧 𝐀𝐜𝐭, 1996 & 𝐒𝐭𝐚𝐦𝐩 𝐀𝐜𝐭, 1899, 𝐈𝐧 𝐫𝐞, (2024) 6 𝐒𝐂𝐂 1. In a concurring opinion he accepted his mistake and stated in Para 277 that he accepts the error made by him in the judgment which observes that Section 11(6-A) of the Arbitration Act has ceased to be operative in view of the enforcement of Section 3 of the Arbitration and Conciliation (Amendment) Act, 2019. He referred to the majority opinion which had pointed out that Section 3 of the 2019 Amendment relating to Section 11(6A), has not been enforced. But is the deadwood exception of Vidya Drolia, still applicable. Tune in to Episode #2 of Raising the Bar with Gaurav, to find out the answer.

Critical difference between Loss of Profits and Loss of Profitability Claims in Indian Construction Arbitration law.