|Bombay High Court
Section 28(3) Arbitration Act | Damages Cap Unenforceable for Foundational Breach of EPC Contract: Bombay HC
Bombay High Court rules that a 1% contractual damages cap cannot limit liability when a party fails to fulfill foundational obligations, such as providing 90% Right of Way within 15 days. The Court applied the business efficacy test under Section 28(3) of the Arbitration Act, reinforcing that rigid contractual limits do not survive fundamental breaches. However, the 18% compounded interest awarded was set aside as contrary to the contract terms.