Non-compliance with mandatory contractual notice periods and lack of proof of loss renders termination wrongful but disentitles damages.

TCIL issued a Notice Inviting Tender for the Horizontal Extension of the State Wide Area Network in Tripura, and Frans was selected as the implementing agency.

TCIL issued a Purchase Order on 28.04.2023, while Frans furnished a Performance Bank Guarantee (PBG).

On 09.06.2023, TCIL terminated the contract and blacklisted Frans for two years, alleging delays and non-performance.

An Arbitral Tribunal (AT) found the termination "wrongful" because TCIL failed to provide a mandatory 45-day notice required by the back-to-back contract terms, but also rejected Frans's claims for damages and invoice payments.

Both parties challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996.

1. Whether the termination of the Purchase Order by TCIL was wrongful and whether Frans was entitled to damages.

2. Whether Frans was entitled to payment for invoices regarding equipment delivery under a "back-to-back" payment arrangement.

3. Whether the encashment of the PBG by TCIL was legal.

4. Whether the blacklisting of Frans was arbitrary and entitled it to damages for loss of reputation.

Section 34 of the Arbitration and Conciliation Act, 1996, which limits judicial interference to grounds of patent illegality, perversity, or conflict with public policy.

The doctrine that a "possible view" by an arbitrator cannot be set aside by the court.

Section 3 of the Special Conditions of Contract (SCC) and Clause 3.12 of the Client’s Tender mandated a 45-day notice for termination and established a "pay-when-paid" mechanism.

Section 73 of the Indian Contract Act, 1872, requires cogent evidence of actual loss for claims of loss of profit or reputation.

The court upheld the AT’s finding that termination was wrongful because Clause 3.9 of the SCC (back-to-back with the Client's Tender) required a 45-day notice period, which TCIL bypassed.

The court rejected TCIL’s plea of "anticipatory breach" under Section 39 of the Contract Act, noting Frans had expressed willingness to perform.

The court upheld the rejection of Frans's claim for damages because Frans failed to prove actual loss, having only performed 15% of the contract value.

Regarding invoices, the court affirmed the "back-to-back" payment logic; since TCIL had not received payment from the end client (DIT), its obligation to pay Frans had not matured under the contract.

While the blacklisting was wrongful, the court agreed that damages for reputation could not be awarded without concrete evidence of lost business opportunities.

TCIL must refund the PBG amount of ₹25,75,512 with 12% interest due to wrongful termination.

Frans is not entitled to damages for loss of profit or reputation due to lack of proof.

Frans is not entitled to invoice payments until TCIL receives funds from the end client.