#force majeure

The Delhi High Court affirmed that Section 34 of the Arbitration and Conciliation Act permits setting aside an award only on patent illegality or public-policy grounds. Consequently, the appellant’s force-majeure claim and interest-rate dispute were dismissed, narrowing set-aside avenues for parties in commercial and real-estate arbitrations.

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.

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.

The Himachal Pradesh High Court reduced a Rs.2 lakh surety bond forfeiture to Rs.25,000 after recognizing landslides and heavy rainfall as force majeure events that objectively prevented the parolee’s return. This sets a critical precedent: administrative authorities cannot impose automatic penalties on sureties without verifying whether external, uncontrollable circumstances genuinely undermined compliance.

The Kerala High Court has ruled that public works contractors may invoke legitimate expectation to demand reconsideration of contract prices after sudden commodity surges, if the government previously granted similar relief under comparable circumstances. This sets a binding precedent for state agencies to honor consistent administrative practices, protecting contractors from unilateral burden-shifting during unforeseen market disruptions.

Madras High Court rules that pandemic-induced disruptions trigger Force Majeure, mandating a 273-day license extension for a railway stall operator. The judgment emphasizes substantive justice over formalistic application of contractual terms, setting a precedent for public procurement disputes.

The High Court of Meghalaya directs referral to arbitration despite force majeure invocation, affirming that contractual arbitration clauses prevail over unilateral termination threats.