Project Delays And The Loss Of Profitability – A Case Study

In May 2025, the Hon'ble High Court of Delhi, in the case of Union of India vs. Ahluwalia Contracts (India) Ltd¹., (hereinafter referred to as the 'Ahluwalia case') adjudicated on the issue pertaining to the denial of claims for loss of overheads/profitability by the Arbitral Tribunal. Even though the issue forming the subject matter of the case had been a part of a number of previously determined cases, it reignited the debate on whether such claims were justifiable in cases where the project duration was unreasonably prolonged and whether the quantum of losses could be justified by any nature of proof.

Facts Forming the Case

The petition before the High Court of Delhi was preferred under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Arbitration Act'), for challenging the impugned order of the Hon'ble Single Judge Bench by way of which, the Arbitral Award denying certain claims, including the claim for the loss of