Delhi High Court: “COVID outbreak can’t be used as an excuse for breach of contract”

Single Judge Bench of Justice Prathiba M Singh passed an order in the Delhi High Court. Earlier, Delhi High Court vacated an order restraining Vedanta Ltd from invoking eight bank guarantees extended by Halliburton Offshore Services in connection with a development contract for certain blocks in Rajasthan.

To elaborate, Vedanta floated a tender for integrated development of certain blocks in Rajasthan. Halliburton Offshore Services (Petitioner), and Vedanta (Respondent) entered into a contract. The terms of the contract stated various Performance, Liquidated Damages, and Advance bank guarantees provided by Halliburton.

However, the petitioner contended invocation of the force Majeure clause in the contract; as being unable to perform the contract due to the COVID-19 lockdown. The petitioner seeks direction to put a stay on the invocation of bank guarantees; furnished by it to the Respondent. Thereafter, in April, the High Court restrained the Respondent from invoking bank guarantees extended by the Petitioner. Notably, adding that the invocation of a bank guarantee could stay only on the grounds of fraud or special equities.

The Project delayed even prior to the outbreak of COVID-19 lockdown. Thus, the Court after analyzing the monthly reports of the Project, noticed that even before the Force Majeure invoked, the Petitioner did not comply with the deadlines for completion of the Project; and was in breach. Noting COVID-19 being a Force Majeure Event; the Court held that, “the outbreak of a pandemic cannot be used as an excuse for non-performance of a contract for which the deadlines were much before the outbreak itself“. Consequently, the ad-interim order was vacated and the petition was disposed of.

CONTINUE READING

The case of Aruna Shanbaug that changed the Euthanasia laws...

0
It is my Belief that death is a friend to whom we should be grateful, for it frees us from the manifold ills which are our lot - Mahatma Gandhi. As human beings, out the umpteen desires that we have, one of them is definitely to have a peaceful death....

Justice D Y Chandrachud’s path-breaking Verdict in the Sabarimala Case of...

0
“Will the quest for equality and fraternity be denuded of its content where women continue to be treated as children of a lesser god in exercising their liberties in matters of belief, faith and worship? Will the pursuit of individual dignity be capable of being achieved if we deny...

After repealing section 377, its time to Legalise Same-Sex Marriage in...

0
A draconian, archaic law that criminalized homosexuality was struck down in a historic judgment given by the Supreme Court in 2018. Two years after the judgment, the LGBTQ (lesbian, gay, bisexual, transgender, and queer) community has now sought legal recognition of their relationships. As the social stigmas surrounding the LGBTQ...

Modern Day Book Burning a.k.a Internet Shutdowns

0
The internet has become an indispensable element in our society for all the obvious reasons. For the majority of users, not a single day goes by where we don't 'need' the internet and the lack of a reliable and fast connection can feel paralyzing. An internet shutdown refers to...

Letter to UNHRC – Dr Kafeel Khan, Punished Because He’s Muslim

0
Kafeel Khan, a doctor by profession and a social activist has been targeted by Yogi Government since 2017, in 3 years he had been maliciously arrested 3 times & imprisoned for around 14 months on the false charges set up against him at many instances. Now he is absolved...

Prison Life In India and its Aftermath

0
Everyone prays to never see the bars of prison in their lifetime. Yet, as fickle as life is, it is quite hard to predict the future. It is in everyone’s benefit to know a little bit about prison life; for movies and cinemas do not do justice to the...