Arbitrator’s reasonable construction of contractual delay compensation clauses precludes judicial interference under Section 37.

The Appellant entered into a Retail/Commercial Office Space Buyer's Agreement with the Respondent on May 31, 2006.

The Respondent received the Occupancy Certificate in June 2009 but failed to intimate the Appellant until January 12, 2011, leading to a delay in handing over possession.

An Arbitrator awarded the Appellant delay damages at the contractually stipulated rate of ₹25 per sq. ft. per month (PSFPM) for the period June 2009 to January 2011.

For the subsequent period until 2014, the Arbitrator denied damages, citing mutual contribution to the delay.

On a Section 34 challenge, the Single Judge modified the award to grant damages at the same rate (₹25 PSFPM) until actual possession was handed over in November 2014, but refused to increase the rate.

The Appellant filed this Section 37 appeal seeking enhancement of damages to ₹200 PSFPM.

1. Whether the Arbitrator and Single Judge erred in calculating damages based on Clause 11.4 of the Agreement rather than actual market rental loss.

2. Whether the findings regarding the Appellant’s failure to prove higher damages warranted interference under the limited scope of Section 37 of the Arbitration and Conciliation Act.

The court applied Section 28(3) of the Arbitration and Conciliation Act, 1996, which requires tribunals to decide in accordance with the terms of the contract.

It relied on the principles from Associate Builders v. DDA and NHAI v. ITD Cementation India Ltd., establishing that construction of a contract is primarily for the arbitrator unless the interpretation is one that no fair-minded or reasonable person would take.

Furthermore, it considered Section 73 of the Indian Contract Act regarding proof of actual loss for damages.

Distinguished Wing Commander Arifur Rahman Khan v. DLF Southern Homes Pvt. Ltd. regarding the power of forums to award compensation exceeding contractual caps in specific consumer contexts.

The Court observed that the Arbitrator interpreted Clause 11.4 — which stipulates ₹25 PSFPM for inability to deliver possession — as the compensation contemplated by the parties at the time of the agreement.

The Court rejected the Appellant’s argument that Clause 11.4 was inapplicable to "negligence," finding the Arbitrator's view to be a plausible interpretation of the contract.

Crucially, the Court noted that the Arbitrator made a finding of fact that the Appellant failed to prove higher damages, as the submitted lease deeds and MagicBricks printouts were not proved in accordance with law.

The Court emphasized that under Section 37, it cannot interfere with such concurrent findings of fact or reasonable contractual interpretations unless they are perverse.

The Court distinguished Arifur Rahman Khan by noting that the Appellant here was awarded a significantly higher interest rate (15-18% p.a.) compared to the 6% in the cited precedent.

The Court held that the impugned order required no interference as it was neither perverse nor unreasonable.

The appeal was dismissed.

The registry was noted to have already released the deposited amounts to the Appellant as per prior interim orders.