NMCCT -TC

16
104

VI TNNLU NATIONAL MED-ARB COMPETITION, 2023

IN THE MATTER OF ARBITRATION

UNDER

TNNLU MED-ARB RULES OF 2024

BETWEEN

Mx. Krishna ………(CLAIMANT)

V.

Karpanai Developers P.Ltd.................................................................................... (RESPONDENTS)

STATEMENT OF DEFENSE ON BEHALF OF THE CLAIMANTS

 VI TNNLU National Med-Arb Competition, 2024 NMAC TC 16

TABLE OF CONTENTS

LIST OF ABBREVIATIONS............................................................................................................................................4
INDEX OF AUTHORITIES............................................................................................................................................. 5
STATUTES....................................................................................................................................................................... 5
CASES............................................................................................................................................................................... 5
BOOKS............................................................................................................................................................................. 5
WEBSITES....................................................................................................................................................................... 6

STATEMENT OF FACTS.......................................................................................................7

ISSUES RAISED.......................................................................................................................8
1. WHETHER THE RESPONDENT HAS COMMITTED A BREACH OF CONTRACT?....8
2. WHETHER THE NOTIFICATIONS AFFECT THE TIMELY COMPLETION OF
PROJECT?..............................................................................................................................................8
3. WHETHER THE CLAIMANT IS ENTITLED TO COMPENSATION?..............................8

SUMMARY OF ARGUMENTS..............................................................................................8
1. WHETHER THE RESPONDENT HAS COMMITTED A BREACH OF CONTRACT?.................8
2. WHETHER THE ORDERS/NOTIFICATIONS AFFECT THE TIMELY COMPLETION OF
PROJECT?...............................................................................................................................................8
3. WHETHER THE CLAIMANT IS ENTITLED TO COMPENSATION?..........................................8

ARGUMENTS ADVANCED...................................................................................................9
WHETHER THE RESPONDENT HAS COMMITTED A BREACH OF CONTRACT?.....................9
A. RESPONDENT HAS FAILED TO ACHIEVE SPECIFIC TIME BOUND RESULT AND THAT
TIME IS THE ESSENCE OF THE CONTRACT......................................................................................9
B. RESPONDENT failed to abide by the timelines as required by the Joint Development Agreement
(JDA).......................................................................................................................................................10
C. RESPONDENT breached the contract by flouting the timeline requirements.............................10
D. APPLICABILTY OF THE FORCE MAJEURE CLAUSE.............................................................11
E. LAWFUL TERMINATION OF THE AGREEMENT.....................................................................12
WHETHER THE NOTIFICATIONS AFFECT THE TIMELY COMPLETION OF THE PROJECT
....................................................................................................................................................................13
A. Material Breach............................................................................................................................13
B. Pertaining to temporal gap between the date of the JDA and the issuance of Govt notification. 16
WHETHER THE CLAIMANT CAN CLAIM COMPENSATION........................................................17
A. Non-transparency and Inaction....................................................................................................18
B. COMPENSATION.........................................................................................................................18

STATEMENT OF CLAIM ON BEHALF OF THE CLAIMANT

 VI TNNLU National Med-Arb Competition, 2024 NMAC TC 16

LIST OF ABBREVIATIONS

AIR All India Reporter

SC Supreme Court

SCC Supreme Court Cases

Ors. Others

Anr. Another

UOI Union of India

V. Versus

Art. Article

Sec. Section

i.e That is

R/W read with

JDA Joint Development Agreement

Art. Article

Govt Government

U/s Under section

STATEMENT OF CLAIM ON BEHALF OF THE CLAIMANT

 VI TNNLU National Med-Arb Competition, 2024 NMAC TC 16

INDEX OF AUTHORITIES

STATUTES

Arbitration and Conciliation Act, 1996............................................................................passim

The Indian Contract Act, 1872…....................................................................................passim
The Specific Relief Act, 1963….......................................................................................passim

CASES

1. Central Bank of India Ltd. v. Hartford Fire Insurance Co. Ltd., (1965) 25 Camp Cas 378, 8
2. K.K. Krishna Kutty v. Green Tree Homes Ventures Pvt. Ltd., 2019 SCC OnLine Mad
8897
3. Halliburton Offshore Service Inc. v. Vedanta Limited 2020 SCC OnLine Del 2068…
4. Standard Retail Pvt. Ltd. v. M/s G.S. Global Corp & Ors,
5. Bharat Petroleum Corpn. Ltd. & Anr. v. M/s. Jethanand Thakordas Karachiwala & Ors,
2000(1)BOMCR289
6. Strategic Outsourcing Inc. v. Continental Casualty Company
7. Dalkia Utilities services PLC v. Celtech International Limited , [2006] EWHC 63 (“Dalkia)
at 99
8. Maharashtra State Electricity Distribution Co Ltd v. DSL Enterprises Ltd, 2010 (1) RAJ 281
(BOM)
9. National Power PLC v. United Gas Company Ltd, (1998) All ER (D) 321

BOOKS

1. Thomson’s The Law of Contract by P C Markanda – 5th Edition 2022

2. Avtar Singh's Law of Contract & Specific Relief

STATEMENT OF CLAIM ON BEHALF OF THE CLAIMANT

 VI TNNLU National Med-Arb Competition, 2024 NMAC TC 16

WEBSITES

1. SCC
2. Westlaw
3. Manupatra
4. Live Law

STATEMENT OF CLAIM ON BEHALF OF THE CLAIMANT

 VI TNNLU National Med-Arb Competition, 2024 NMAC TC 16

STATEMENT OF FACTS

The CLAIMANT, Mx. Krishna, a resident of Trichy owning a property of an extent of 2 acres in
Bayangammedu in Trichy was approached by the RESPONDENT, Karpanai Developers P. Ltd. to
undertake joint ventures for property development.
On 11 December 2019, after a series of negotiations, the parties signed a Joint Development
Agreement (JDA) to construct residential and commercial complex. The complex was named as
Mithila (hereinafter referred as ‘Project’). The property when developed will have 18 commercial
offices and 24 apartments consisting of 8 floors.
On 2 March 2020, the Govt of India responded to the COVID-19 situation by imposing a lockdown
for the entire country for a period of 68 days. In September 2020, the CLAIMANT requested the
RESPONDENT for updates on the Project and was informed that the pandemic and the lockdown
had affected the progress and was promised that the application for sanction of the plans would be
filed soon.
The plans were completed by October 2020. Subsequently, on 9 January 2021, the
RESPONDENT filed an application for the sanction of the plans for the project. However, on 21
January 2021, the Govt of Tamil Nadu issued a notification increasing the fees for the applications
for plan sanctions by 700 to 900% for all districts in Tamil Nadu and the revision applied
retrospectively, translating to a hike in the cost of the Project from Rs. 15 lakhs to Rs. 135 lakhs.
The RESPONDENT challenged the revision by writ petition in the Madras High Court in February
2021. Subsequently, on 17 October 2021, the Ministry of History and Culture, Central Govt passed
a ban order on the sanctions given for the construction of the multi-storeyed buildings exceeding
four storeys or beyond 45 feet in height in the ‘areas of cultural significance’ until the next plan
Master Plan for the development of those respective cities are finalised. The ban order listed these
areas, which included the Bayangammedu in Trichy.
The CLAIMANT issued a lawyer’s notice on 17 December 2021 stating their intention to terminate
the JDA and the Power of Attorney, following which a detailed reply was issued by the
RESPONDENT. After further communications, on 20 March 2022, the CLAIMANT issued a letter
of termination to the RESPONDENT. The CLAIMANT filed a petition in the District Court U/s 9
of the Arbitration and Conciliation Act, 1996 for interim measures. The court directed the parties to
maintain status quo and directed them to mediation.

STATEMENT OF CLAIM ON BEHALF OF THE CLAIMANT

 VI TNNLU National Med-Arb Competition, 2024 NMAC TC 16
ISSUES RAISED
1. WHETHER THE RESPONDENT HAS COMMITTED A BREACH OF CONTRACT?
2. WHETHER THE NOTIFICATIONS AFFECT THE TIMELY COMPLETION OF
PROJECT?
3. WHETHER THE CLAIMANT IS ENTITLED TO COMPENSATION?

SUMMARY OF ARGUMENTS

1. WHETHER THE RESPONDENT HAS COMMITTED A BREACH OF CONTRACT?

The claimant humbly submits that the respondent has breached the terms of the contract, particularly the
Joint Development Agreement (JDA). The JDA meticulously outlined specific timelines for crucial phases
of the project. Regrettably, the respondent consistently failed to meet these established deadlines, thereby
violating the contractual obligations. The argument is three fold:
a. Time is the essence of the contract
b. Applicability of the force majeure clause
c. Lawful termination of agreement

2. WHETHER THE ORDERS/NOTIFICATIONS AFFECT THE TIMELY COMPLETION OF

PROJECT?

The counsel on behalf of the claimants submits that the orders/notifications cited by the
respondents serve as mere excuses for their failure to adhere to the terms of the contract, resulting in
a material breach. The claim contends that the time gap, for which no justifiable explanation has
been provided by the respondents, represents a significant and unjustified delay in fulfilling
contractual obligations. This unexplained delay has contributed to a material breach of the contract,
raising concerns about the respondents' commitment to the agreed-upon timelines and the overall
project schedule.
3. WHETHER THE CLAIMANT IS ENTITLED TO COMPENSATION?

The claimant contends that the respondent's breach of contract, marked by non-compliance with the Joint
Development Agreement (JDA) timelines, entitles the claimant to seek compensation. The lack of
transparency and effective communication from the respondent throughout the project, especially regarding
delays, is highlighted. Sec. 73 is invoked, emphasizing the duty of the party suffering from a breach to take
remedial steps. The claimant submits that, as per the valid and binding contract, compensation is warranted
for the sustained losses due to the respondent's inefficiencies, which led to the rightful termination of the
contract. The claimant pleads for compensation to restore them to the position they would have been in had
the breach not occurred.

STATEMENT OF CLAIM ON BEHALF OF THE CLAIMANT

 VI TNNLU National Med-Arb Competition, 2024 NMAC TC 16
ARGUMENTS ADVANCED

WHETHER THE RESPONDENT HAS COMMITTED A BREACH OF CONTRACT?

A. RESPONDENT HAS FAILED TO ACHIEVE SPECIFIC TIME BOUND RESULT AND

THAT TIME IS THE ESSENCE OF THE CONTRACT

1. RESPONDENT breached the contract and shall be liable for the ensuing damages, because
(a) Time is the essence of the contract and (b) RESPONDENT failed to abide by the
timelines as required by the Joint Development Agreement (JDA) and (c) RESPONDENT
breached the contract by flouting the timeline requirements.

a. Time is the essence of the contract

2. Paragraph 1 of the Sec. 55 of the Indian Contract Act, 1872 provides that if the intention of
the parties was that time should be of the essence in the contract, failure by a party to
perform at or before a specified time makes such contract voidable at the option of the
promise, in this case the CLAIMANT. In contracts where performance within or at the time
specified is crucial, failure “to do any such thing” at or before the time agreed will render the
contract voidable.
3. It is the court’s duty to give effect to the bargain of the parties and that where the bargain
was in writing the court must give effect to the plain meaning of the words. The plain-
meaning rule in construing documents is reflected in Sec. 94 of the Indian Evidence Act,
1872. The said provision states that evidence need not be given to show that the language
used in a document applies to existing facts if two conditions are satisfied: a) the language
used in the document is plain, and b) the language used applies accurately to the existing
facts. Where parties expressly agree that time would be of the essence, there is no ex-ante
justification why the court should go beyond the literal meaning of the term and see if other
provisions of a contract conveyed a meaning otherwise. 1 CLAIMANT and RESPONDENT
after having entered into a Joint Development Agreement, agreed for the development of the
property in accordance with the time schedule set forth in the JDA. The entire project should
have been completed latest by the beginning of the year 2022 2, but the RESPONDENT has
not completed the construction of the project causing hardship and mental agony to the
CLAIMANT. When a person enters a contract and lures the public and collects huge amount

1
Central Bank of India Ltd. v. Hartford Fire Insurance Co. Ltd., (1965) 25 Camp Cas 378, 8
2
Med-Arb Proposition, Paragraph No. 6

STATEMENT OF CLAIM ON BEHALF OF THE CLAIMANT

 VI TNNLU National Med-Arb Competition, 2024 NMAC TC 16
3
in several crores cannot contend that time is not essence of contract. CLAIMANT has
considered the contract to be one, where time is the essence of contract and has been active
in issuing notice to the RESPONDENT for the same. The earliest of this had been during
September 2020, whereby the CLAIMANT requested for updates on the Project since the
RESPONDENT had not taken up to inform the CLAIMANT regarding the delay in getting
the plans sanctioned.
4. Furthermore, the CLAIMANT was willing to perform his contract and through his acts
proved that time is the essence of contract but the same cannot be said about the
RESPONDENT causing loss and hardships to the CLAIMANT.

B. RESPONDENT failed to abide by the timelines as required by the Joint Development

Agreement (JDA)4

5. The Joint Development Agreement (JDA) set out the time schedule for the development of
the property. The timelines were agreed as below:
i. Firstly, detailed plans for the project to be prepared by the RESPONDENT within a
period of two (2) months from the date of the JDA, i.e., the JDA was executed on
11.12.2019 and two (2) months from then would mean latest by 11.2.2020. However,
the RESPONDENT failed to meet the said deadline.
ii. Secondly, the sanction for the plans had to be obtained within a period of four (4)
months from the date of the JDA, with an automatic extension of one (1) month in
case of delay. This translates to sanctions being obtained latest by May 2020.
However, the RESPONDENT failed to meet the said deadline.
iii. Furthermore, the deadline for the completion of the whole project was within a
period of two years from the approval of the plan sanction. However, the
RESPONDENT failed to meet the said deadline as well.

Essentially, the RESPONDENT failed to meet the deadlines set forth at every stage of the
contract and also failed to communicate the delay to the CLAIMANT at every stage.

C. RESPONDENT breached the contract by flouting the timeline requirements

6. Time being the essence of the contract, RESPONDENT breached the contract by flouting
the timeline requirements. There was a delay of over nine (9) months in preparing the
detailed plan as against the timeline provided i.e., two (2) months from the date of the JDA.

3
K.K. Krishna Kutty v. Green Tree Homes Ventures Pvt. Ltd., 2019 SCC OnLine Mad 8897
4
Med-Arb Proposition, Clause 3.2.5, Annexure A

STATEMENT OF CLAIM ON BEHALF OF THE CLAIMANT

 VI TNNLU National Med-Arb Competition, 2024 NMAC TC 16
Similarly, there was a long delay in filing the application for sanction of the plans for the
Project. Furthermore, the RESPONDENT failed to issue notice regarding the long delays
and did not take active measures in curing the default.

D. APPLICABILTY OF THE FORCE MAJEURE CLAUSE

1. ‘Force Majeure’5 means an “event or effect that can be neither anticipated nor controlled….
[and] includes both acts of nature (e.g., floods and hurricanes) and acts of people (e.g., riots,
strikes, and wars).”6 The general categorisation of an event/occurrence, like the mass
lockdown due to COVID-19, as force majeure event per se is meaningless, unless the event
actually impacts the obligations under the contract.

The impact of the event on the obligations under the contract

2. The question as to whether COVID-19 would justify non-performance or breach of a
contract has to be examined on the facts and circumstances of each case. Every breach or
non-performance cannot be justified or excused merely on the invocation of COVID-19 as a
force majeure condition. It is the settled position of law that a force majeure clause is to be
interpreted narrowly and not broadly. Parties have to be compelled to adhere to the
contractual terms and conditions and excusing non-performance would be only in
exceptional situations.7 In the present case, the force majeure clause, by itself, would not
relieve a party from the performance of contractual obligations. The force majeure does not
have a direct impact on the non-performance of the contractual obligations. Firstly, the
RESPONDENT failed to meet the first deadline of preparing the plans for the project. The
JDA required the detailed plan to be prepared within two (2) months from the date of the
JDA, which was prior to the date of the imposition (2 March 2020) of the lockdown.
Furthermore, there was no direct impact on the RESPONDENT in preparing the plans and
that the approval of the same was possible within the timeline of the contract i.e., by May
2020 considering that the lockdown was imposed for only sixty-eight (68) days, which was
gradually eased.

The Bombay High Court, in the case of Standard Retail Pvt. Ltd. v. M/s G.S. Global Corp &
Ors. 8 held that one of the grounds for refusing to grant an injunction was the absence of a direct
causal link between the pandemic and the non-performance of the contract.

5
Med-Arb Proposition, Clause 11, Annexure A
6
Blacks Law Dictionary (11th Edition, 2019)
7
Halliburton Offshore Service Inc. v. Vedanta Limited 2020 SCC OnLine Del 2068
8
Standard Retail Pvt. Ltd. v. M/s G.S. Global Corp & Ors,

STATEMENT OF CLAIM ON BEHALF OF THE CLAIMANT

 VI TNNLU National Med-Arb Competition, 2024 NMAC TC 16
3. It was the duty of the RESPONDENT to provide notice to the CLAIMANT within thirty
(30) days of the force majeure event stating the period of time the occurrence is expected to
continue.9 The force majeure clause in the contract mandates the impacted party to use
diligent efforts to end the failure or delay and ensure the effects of such delay is minimised.
However, the RESPONDENT failed to communicate and use diligent efforts to minimise the
effects of the delay. Instead, the RESPONDENT sat over the delay until the CLAIMANT
made efforts to enquire the status of the project.

E. LAWFUL TERMINATION OF THE AGREEMENT

1. After the CLAIMANT’s attempts to seek clarifications regarding the project’s status and
the measures taken by the RESPONDENT to fulfil the obligations, the CLAIMANT was
met with no substantive response. Instead, the interactions were concluded with
protracted arguments. Consequently, the CLAIMANT sent a legal notice to the
RESPONDENT on 17.12.2021 in light of the delays and repeated breaches of contract,
thereby invoking Clause 3.2.5 of the JDA. Through this legal notice, the CLAIMANT
called upon the RESPONDENT to remedy the breaches and begin the procurement
process for the construction within 90 of the notice. 10 The notice also demanded prompt
response within fifteen (15) days from the receipt of this communication on the plan of
action and the steps taken by the RESPONDENT to meet the requirements of clause
3.2.5 of the JDA. Subsequently, the CLAIMANT sent a rejoinder to reply notice dated
23.12.2021 on 30.01.2022 addressing the issues relating to the delay in the project.
Furthermore, the notice also sought precise details outlining the specific actions or
omissions considered as breach by the RESPONDENT. However, due to the inaction
and ineffective communication from the RESPONDENT, the CLAIMANT was
compelled to issue a notice of termination. 11
2. Clause 3.2.5 of the JDA states “In the event any of these timelines are not met, either
party may issue a notice of 90 days, to enable curing of the default. If after the period of
90 days the default remains, the party may issue a notice of termination upon which the
agreement will terminate”.12 Accordingly, the CLAIMANT has acted in consonance
with the provisions of the contract and at every stage of the contract has maintained
effective communication as required by the contract. Furthermore, there no procedural
9
Med-Arb Proposition, Clause 11.2, Annexure A
10
Med-Arb Proposition, Paragraph No. 7, Annexure C
11
Med-Arb Proposition Page 26
12
Med-Arb Proposition Page 10

STATEMENT OF CLAIM ON BEHALF OF THE CLAIMANT

 VI TNNLU National Med-Arb Competition, 2024 NMAC TC 16
lapses on part of the CLAIMANT in terminating the contract. Hence, the termination is
valid.
3. Termination of contract is considered to be lawful when a legitimate reason exists to end
the contract before performance has been completed. Repudiatory breach is one of the
underlying principles to terminate the contract validly. It can occur if the party does not
intend to perform its part of under the contract any further or does acts which are
inconsistent with the terms of the contract. Such an act ultimately affects the rights of the
other party.
4. As a result, if the party chooses to terminate the contract, it must be done in fair and
reasonable manner as termination is also subjected to principles of natural justice. Other
than repudiatory breach, a contract can also be terminated in order to mitigate losses. In
the case of Bharat Petroleum Corpn. Ltd. & Anr. v. M/s. Jethanand Thakordas
Karachiwala & Ors13 the appellant had suffered huge losses and there was no other
alternative before them than to terminate the contract. The court was of the opinion that
the contract was not specifically enforceable due to the losses caused to the appellant. In
the case of Strategic Outsourcing Inc. v. Continental Casualty Company14 it was
specifically held that “a party’s desire to avoid financial losses constitutes reasonable
grounds for declining to perform otherwise applicable contractual obligations.”

Hence, the CLAIMANT pleads that the termination is lawful.

WHETHER THE NOTIFICATIONS AFFECT THE TIMELY COMPLETION OF

THE PROJECT

A. Material Breach

1. A “material breach” of contract is a breach (a failure to perform the contract) that strikes so
deeply at the heart of the contract that it renders the agreement “irreparably broken” and
defeats the purpose of making the contract in the first place. The breach must go to the very
root of the agreement between the parties. If there is a material breach (sometimes referred
to as “total” breach), the other party can essentially end the agreement and claim damages
caused by the breach.

13
Bharat Petroleum Corpn. Ltd. & Anr. v. M/s. Jethanand Thakordas Karachiwala & Ors, 2000(1)BOMCR289
14

STATEMENT OF CLAIM ON BEHALF OF THE CLAIMANT

 VI TNNLU National Med-Arb Competition, 2024 NMAC TC 16
2. In deciding whether a breach is material, the standard resolute is to refer to a legal guide
known as the Restatement (Second) of Contracts, as well as to other court decisions relating
to contractual disputes.
3. The Joint Development Agreement executed by the parties on 11.12.2019 outlined a clear
trajectory for the project’s completion within two years from the date of the approval of plan
sanction. However, the claimant noticed that the completion of the plan was extended
unreasonably beyond twelve months, far exceeding the stipulated timeframe. This significant
delay constitutes a material breach on part of the RESPONDENT as it hinders the fulfilment
of contractual obligations. The JDA expressly provides for enforcement against such non-
performance and in this regard the RESPONDENT is accountable for such non-
performance, providing the CLAIMANT with the legal grounds to enforce the contract
against the RESPONDENT. A material breach, being serious in nature, implies that the
parties are now impeded from fulfilling the contract either partially or entirely. In light of
this violation, the CLAIMANT is well within their rights to pursue legal remedies to rectify
the breach and mitigate the adverse effects on the project.
4. A breach is material; is a question of fact, defined generally by the English High Court in
the decision of Dalkia Utilities services PLC v. Celtech International Limited 15 which
contains some very helpful guidelines about what constitutes a material breach . Material
breach is defined as “a breach that has a serious effect on the benefit which the claimant
would otherwise derive”, the common denominator in this case is that a material breach is
substantial, due to various reasons. The financial viability of the project emerged as a crucial
lifeline for the CLAIAMANT, as the anticipated profit or monetary income held the promise
of mitigating the losses incurred. In a strategic manoeuvre, the CLAIAMANT envisioned the
project as a potential saviour, with its generated revenue acting as a salve for the financial
setbacks experienced. The web of financial intricacies surrounding the project was carefully
woven to not only offset the existing losses but also to establish a robust financial foundation
for future endeavours. The prospect of positive cash flow from the venture was seen as a
fortuitous turn of events, strategically aligning with the claimant's objective to regain fiscal
stability. This symbiotic relationship between the project's profitability and the
CLAIMANT’s financial recuperation underscored the significance of prudent planning and
effective execution in navigating the intricate landscape of business challenges.

Christopher Clarke J laid down the following factors in assessing the materiality of breach
i. The nature of the contract and the specific obligations involved.

15
Dalkia Utilities services PLC v. Celtech International Limited , [2006] EWHC 63 (“Dalkia) at 99

STATEMENT OF CLAIM ON BEHALF OF THE CLAIMANT

 VI TNNLU National Med-Arb Competition, 2024 NMAC TC 16
ii. What the breach consists of and its impact on the claimant.
iii. The circumstances in which the breach arises, including any explanation given or apparent
as to why it has occurred.

Two principles which emerge from the rule of law laid down in cases relating to fundamental breach
of contract can be said to be16:

i. A fundamental breach is a breach of the most basic and essential term of the
contract, which goes to the root of the contract; and
ii. A breach of fundamental term enables the aggrieved party to repudiate the
contract and sue for damages17
5. In the present case, both principles have surfaced, thereby solidifying the establishment of a
breach.
6. The essence of the contractual agreement lay within the framework of a Joint Development
Agreement (JDA), outlining the obligations and responsibilities of the involved parties. The
crux of this contractual commitment mandated the completion of the designated project
within a stipulated timeframe of two years from the sanction of the plan. However, the
breach in this contractual relationship extended beyond mere material infractions,
encompassing the critical aspect of communication. The culpability of the party in breach
was not confined solely to the failure in delivering the project within the specified timeline
but also extended to the non-disclosure or inadequate communication to the CLAIMANT
regarding the delays that transpired. The breach of contract, therefore, assumed a dual nature
—both in terms of the tangible failure to meet the project completion deadline and the
intangible breach of the duty to communicate effectively and transparently about the delays
incurred. This compounded breach not only jeopardized the timely execution of the project
by the RESPONDENT but also undermined the fundamental principles of trust and
cooperation inherent in contractual agreements, emphasizing the complex nature of the
challenges faced in contractual relationships.

In the case of National Power PLC v. United Gas Company Ltd.18, Justice Colman conducted a
comprehensive analysis of the term "material breach." His interpretation elucidated that a material
breach referred to a substantial violation of the party's obligations, deemed serious enough to
warrant contract termination if the remedy for such a breach was not initiated within seven days.
The court, in its wisdom, established a crucial distinction between material and repudiatory
16
P.C. Markanda, The Law of Contract 1495 (5th ed. 2022).
17
Maharashtra State Electricity Distribution Co Ltd v. DSL Enterprises Ltd, 2010 (1) RAJ 281 (BOM)
18
National Power PLC v. United Gas Company Ltd, (1998) All ER (D) 321

STATEMENT OF CLAIM ON BEHALF OF THE CLAIMANT

 VI TNNLU National Med-Arb Competition, 2024 NMAC TC 16
breaches. It emphasized that the ability to rectify a material breach set it apart from a repudiatory
breach, asserting that restricting the innocent party's common law rights in the case of the latter was
not commercially reasonable. Consequently, the term "material breach" was deemed appropriate for
describing non-repudiatory breaches, underscoring the significance of timely remedies and
preserving contractual integrity in instances of serious violations. This legal precedent reinforced
the nuanced understanding and application of the concept of material breach in contractual disputes.

B. Pertaining to temporal gap between the date of the JDA and the issuance of Govt
notification

1. The Joint Development Agreement (JDA) between the involved parties was formally
executed on 11th December 2019, following an extensive series of negotiations. However, a
significant development unfolded when the Govt of Tamil Nadu issued a notification on 21st
January 2021, announcing a substantial increase in fees for plan sanction applications across
all districts of Tamil Nadu. This fee hike ranged from 700% to 900%, marking a
considerable adjustment in the financial landscape for such applications. Intriguingly, the
temporal gap between the signing of the JDA on 11th December 2019 and the Govt's
notification on 21st January 2021 amounted to thirteen months and ten days. This timeline
appeared notably disproportionate, especially when considering the typical duration required
for plan sanctions. The elongated period raised questions about the reasonable expectations
and assumptions made during the negotiation and execution of the JDA, potentially
impacting the financial projections and feasibility of the agreed-upon terms within the
agreement.
2. The absence of any information or explanatory details from the RESPONDENT regarding
the significant delay during the elapsed time gap has emerged as a pivotal concern for the
CLAIMANT. Despite the CLAIMANT's anticipation and subsequent legal notice, has yet to
provide a justifiable explanation for the prolonged period in question. This lack of
communication and transparency has created an atmosphere of uncertainty, prompting the
claimant to take the decisive step of terminating the Joint Development Agreement (JDA).
RESPONDENT, in defense, asserts that the delay is attributed to an order from the Ministry
of Culture, Govt of India, which mandated the cessation of multi-storeyed building projects
in areas of cultural significance until the respective plans were re-worked, finalized, and
approved. However, the CLAIMANT contends that this notification would not have
adversely affected the project's development if the plan sanction had been obtained and

STATEMENT OF CLAIM ON BEHALF OF THE CLAIMANT

 VI TNNLU National Med-Arb Competition, 2024 NMAC TC 16
19
construction initiated at the appropriate time. Notably, the Order explicitly indicates that
sanctions already issued, where work on multi-storeyed buildings has not commenced or
completed, would remain unaffected.
3. The JDA, as a binding agreement, establishes a timeline for construction that should have
commenced months before the issuance of the order, bringing into question the validity and
adequacy of RESPONDENT’s explanation and the consequent termination of the agreement.
Similarly, the impact of the lockdown imposed by the state authorities in response to the
COVID-19 pandemic echoes the previous issues, underscoring the critical importance of
adhering to pre-established timelines and deadlines. RESPONDENT found themselves
entangled in situations that might have been mitigated had due diligence been exercised in
accordance with contract. The failure to align actions with the agreed timelines exacerbated
the impact of external factors on the RESPONDENT’s ability to fulfil contractual
obligations, leading to hardships being caused to the CLAIMANT.
4. The crux of the CLAIMANT’s argument lies in the assertion that the governmental orders or
notifications, whether related to increased fees or the COVID-19 induced lockdown, would
not have adversely affected the project's completion if the RESPONDENT had initiated the
plan sanction process at the stipulated time. Specifically, the claimant emphasizes the
significance of the 68-day window starting from 2nd March 2020, during which the COVID-
19 lockdown was announced. Had the RESPONDENT promptly commenced the plan
sanction process in accordance with the agreed timelines since the signing of the Joint
Development Agreement (JDA) on 11 December 2019, there would have been three
additional months available, i.e. from 11.12.2020 to 02.03.2020 and a lockdown for 68 days
approximately till the mid of May 2020. From the mid of May 2020 to 21 January 2021 the
plan sanction could have been completed if the plan was prepared according to the set
timelines. However, the claimant points out the substantial delay in the completion of the
plan itself that was finalized by October 2020, which represents a significant deviation from
the agreed timelines.

WHETHER THE CLAIMANT CAN CLAIM COMPENSATION

When there is a breach of contract, the innocent party is entitled to receive compensation from the
breaching party for any loss or damage caused to him thereby. In the present case, the claimant
further states the claimant has suffered breach on various grounds mentioned below that potentially
entitles the claimant to receive compensation from the respondent.
19
Med-Arb Proposition, Order, Clause 3, Page 4

STATEMENT OF CLAIM ON BEHALF OF THE CLAIMANT

 VI TNNLU National Med-Arb Competition, 2024 NMAC TC 16

A. Non-transparency and Inaction

1. After the execution of the JDA, it was the duty of the parties to maintain effective
communication with each other. While the RESPONDENT failed to adhere to the timelines
of the JDA, it was their duty to communicate effectively regarding the delay at each stage of
the Project. It was only upon the request of the CLAIMANT for the updates on the project in
September 2020, the CLAIMANT learned that plans were yet to be prepared. Essentially,
the RESPONDENT did not communicate about the status of the project to the CLAIMANT
right from the date of the execution of the Project. This failure to effectively communicate
shows the lackadaisical attitude of the RESPONDENT towards the Project. The
RESPONDENT

B. COMPENSATION

1. Sec. 73 The party who suffers from the breach of the contract cannot sit with folded hands in
the good expectation of recovering the compensation; it must take steps for remedying the
inconvenience caused by the non-performance of the contract. In this case there is a valid
and binding contract between the parties. It is provided that where a party sustains a loss on
account of breach of contract, he is entitled to receive from the party who has broken the
contract, compensation for such loss or damages.20
2. The theory of damages is such that they are a compensation and satisfaction for the injury
sustained, i.e. that the sum of money to be given for reparation of the damages suffered
should be as nearly as possible, be the sum which will put the injured party in the same
position as he would have been if he had not sustained the wrong for which he is getting
damages.21

In this case, the CLAIMANT has rightfully terminated the contract due to the inefficiencies on part
of the RESPONDENT, hence CLAIMANT pleads that the CLAIMANT is entitled to compensation.

20
Tarsem Singh v. Sukhminder Singh, 1998 (3) SCC 471
21
B.R. Herman & Mohatta v. Asiatic Steam Navigation Co. Ltd., AIR 1941 Sind 146

STATEMENT OF CLAIM ON BEHALF OF THE CLAIMANT