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ARTICLE · 23 AUGUST 2019

NTPC v. Voith Hydro Joint Venture: Force Majeure Clause v. Impossibility Under Section 56?

Shardul Amarchand Mangaldas & Co
Shardul Amarchand Mangaldas & Co
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Shardul Amarchand Mangaldas & Co

Shardul Amarchand Mangaldas & Co

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Recently in NTPC v. Voith Hydro Joint Venture, 2019 SCC Online Del 9014, the High Court of Delhi made certain important observations with respect to the scope and application of Section 56 of the Indian Contract Act, 1872 .

IndiaCorporate/Commercial Law

Recently in NTPC v. Voith Hydro Joint Venture, 2019 SCC Online Del 9014, the High Court of Delhi ("Court") made certain important observations with respect to the scope and application of Section 56 of the Indian Contract Act, 1872 ("Contract Act"). Section 56 of the Contract Act stipulates that a underlying contract is rendered void when obligations under an agreement become impossible to perform or where occurrence of an unforeseeable supervening event frustrates performance of the agreement. In this case, the Court affirmed the decision of the arbitral tribunal and ruled that Section 56 of the Contract Act would not prevail over the provisions of the contract, where the contract itself contains a force majeure clause.

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