Topic

Damages cap in contracts

1 articleLatest June 2026
Section 34 Arbitration Act | Damages Cap Unenforceable for Fundamental Breach of EPC Contract: Bombay HC
Case Law Analysis
|Bombay High Court

Section 34 Arbitration Act | Damages Cap Unenforceable for Fundamental Breach of EPC Contract: Bombay HC

Bombay High Court rules that a 1% damages cap in an EPC contract cannot limit liability when the employer fails to provide critical right-of-way, constituting a fundamental breach. The judgment reinforces the business efficacy test and restricts judicial interference under Section 34 to only patent illegality, while setting aside compounded interest for violating contractual terms.