Delhi High Court Sets Aside Arbitration Award for Reliance on Conciliation Admissions and Unsupported Damages
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TL;DR
- Delhi High Court set aside an arbitral award in a construction dispute.
- Court found reliance on conciliation admissions and unsupported damages improper.
- Arbitrator's personal experience cannot substitute for proof of loss.
- Award and additional award were both annulled.
Overview
On 10 September 2026, the Delhi High Court set aside an arbitral award between Eco Green Buildtech Pvt. Ltd. and Vikartan Infrastructure Pvt. Ltd. concerning construction contract claims.
The Court found that the arbitral tribunal had improperly relied on statements from failed conciliation proceedings and awarded damages without sufficient evidence.
The High Court held that an arbitrator's personal experience or trade practice cannot substitute for concrete proof of loss in awarding damages.
What Happened
Eco Green Buildtech Pvt. Ltd. and Vikartan Infrastructure Pvt. Ltd. were in dispute over a construction contract for Sikka Kamya Greens, Greater Noida.
Vikartan initiated arbitration, raising claims for work executed, idling, overheads, material at site, and loss of profit. Eco Green filed counterclaims.
The arbitral tribunal found Eco Green responsible for delay and partly allowed Vikartan's claims based on its findings and the Local Commissioner's report.
Eco Green challenged the award under Section 34 of the Indian Arbitration and Conciliation Act, arguing that the tribunal relied on admissions from unsuccessful conciliation and granted damages unsupported by evidence.
The Delhi High Court found that the tribunal inappropriately relied on settlement admissions and on its own experience rather than requiring proof of actual loss, and denied Eco Green a fair chance to contest the commissioner's report.
Accordingly, the Court annulled both the main and additional awards.
Context
Indian courts routinely review arbitral awards challenged under Section 34 of the Arbitration and Conciliation Act, 1996.
This decision follows Supreme Court precedents on confidentiality in mediation and the requirement of proving actual loss for damages.
The judgment addresses concerns about tribunals substituting personal knowledge for proper evidence and about the use of confidential settlement discussions in later adjudication.
Why It Matters
- The judgment clarifies that admissions or statements made during failed conciliation or mediation cannot be used as evidence in later arbitral adjudication.
- It underscores the need for arbitrators to base awards on actual evidence rather than personal experience or trade practice, particularly for damages and loss-of-profit claims.
- The case sets procedural standards for confidentiality and proof requirements in arbitration under Indian law.