Quick Summary: On February 18, 2026, the Delhi High Court overturned part of a decision made by an arbitrator involving a cost increase claim of ₹47,49,635 between Airports Authority of India (AAI) and M/S K.B. Contractors. The court found the decision lacked proper explanation.
This case started with a complaint filed by the Airports Authority of India (AAI) against M/S K.B. Contractors. The argument was over a decision made by an arbitrator on August 15, 2014, specifically about Claim No. 2 regarding cost increase.
Claim No. 2 involved a cost increase amounting to ₹47,49,635. The contract allowed for price increases for work done beyond the agreed time. However, AAI argued that there was no proof to support this claim.
"There is neither any evidence nor any basis for quantifying the said cost escalation at ₹47,49,635," argued Mr. Digvijay Rai, representing AAI.
Justice Harish Vaidyanathan Shankar noted that the arbitrator's decision lacked any explanation or proof for the cost increase amount. The court found the decision to be clearly wrong due to the absence of documented evidence or a clear method for the calculation.
The court referred to the Supreme Court's decision in PSA SICAL Terminals Pvt. Ltd. v. Board of Trustees, emphasizing that decisions without evidence are illegal. It also cited other cases to highlight the need for clear explanations in arbitrator decisions.
The court decided that the part of the decision related to Claim No. 2 could be separated from the rest. This means the cost increase part can be reviewed independently without affecting other claims.
On February 18, 2026, the Delhi High Court overturned the cost increase claim, allowing for a fresh look at this specific part of the decision. This decision highlights the importance of evidence and clear explanations in arbitration.
