#commercial contract

The Bombay High Court restrained encashment of bank guarantees after finding that a mutually agreed, written, and implemented compensation adjustment for pandemic-related toll losses cannot be nullified by internal audit objections. This sets a critical precedent that contractual good faith and equitable adjustment take precedence over the absolute nature of bank guarantees in infrastructure contracts, protecting project operators from arbitrary financial clawbacks.

Delhi High Court rules that arbitrators lack jurisdiction to award interest or compensation on claims explicitly withdrawn by parties, even if framed as indirect relief. The decision reinforces the finality of claim withdrawal under arbitration agreements, impacting commercial dispute resolution strategies.

Calcutta High Court rules that the lease period for mining contracts begins from the date of registration, not physical handover, even if possession is delayed by state authorities. The decision clarifies that force majeure clauses cannot be invoked for administrative delays, impacting leaseholders' operational timelines and contractual obligations.

Madras High Court rules that unilateral tariff revisions under a power supply agreement require proof of increased fuel costs to be valid. Stopping supply before the payment deadline waives the supplier’s right to enforce termination clauses, entitling the consumer to damages for alternate power procurement.

The Bombay High Court ruled that title deeds must be deposited with the court as security for contractual claims under Letters of Understanding (LOUs), even if sale obligations remain unfulfilled. This decision reinforces the enforceability of interim relief mechanisms in commercial disputes, ensuring creditors' interests are protected pending final adjudication. Developers and contracting parties must now factor this heightened security requirement into their transaction structures.