Quick Summary: The Bombay High Court upheld a decision requiring Proteus Ventures LLP to pay Archilab Designs for work they completed. The court looked into issues of unpaid bills, interest rates, and whether Proteus' partners should also be responsible for the debt.
Proteus Ventures LLP hired Archilab Designs for several projects in Mumbai and Pune. Even after finishing the work, Archilab said they weren't fully paid. They were owed about Rs. 1.88 crores, with Proteus admitting they owed some of this money.
"The work commissioned to Archilab was worth about Rs. ~3.93 crores. Archilab received only Rs. ~2.04 crore."
The arbitration process started in June 2023, with several meetings held online. Proteus' partners tried to avoid being part of the case, saying they weren't necessary to it. However, the tribunal decided they were also responsible for the payment.
"The decision makes the Designated Partners also responsible for paying the awarded amount."
The court, led by Justice Somasekhar Sundaresan, found that Proteus was responsible for the debt, but decided the partners shouldn't be held responsible because of the way the partnership was set up.
"The problem with the decision can be fixed by removing the part that makes the partners also responsible."
Originally, a very high interest rate of 2% per day was mentioned in the agreement. The court found this unreasonable and agreed with the tribunal's decision to use an 18% per year rate. Additionally, Rs. 24 lakhs were awarded for the stress caused by Proteus' actions.
"The tribunal also found that the later agreement mentioned an interest rate of 18% per year, and used that rate."
The court rejected Proteus' request to change the arbitration award, stating that the decision was fair. This case shows how important it is to follow contracts and how arbitration can help solve business disagreements.
