Summary
The electricity distributor challenged an arbitral damages award arising from its failure to provide installation locations for leased load-management equipment. Upholding concurrent findings of fundamental breach, the Court sustained termination, the damages calculation, rejection of waiver and mitigation objections, and refusal of belated amendments.
Issues
- Whether the factual findings of fundamental breach warranted interference with the award.
- Whether damages could cover installed equipment, stranded equipment and unused raw materials, and whether waiver or failure to mitigate defeated recovery.
- Whether belated amendments to the section 34 petition and appeal were rightly refused.
Held
- The arbitrators were masters of the evidence. Their findings that the distributor prevented performance by withholding locations and that the supplier remained ready and willing were supported by evidence and not perverse; the challenge sought impermissible factual reconsideration. (¶¶ 42–43, 49–52)
- Rejection of non-renewal of the letter of credit as a breach did not invalidate termination based on other established breaches. Repudiation may be justified on an existing ground even if not stated in the correspondence. (¶ 44–47)
- An innocent party validly terminating for fundamental breach can recover losses across the contract, including performed work and work prevented. Reduced lease rentals for installed and stranded equipment and bare unused raw-material costs were reasonable measures here. (¶ 53–59)
- The custom-built equipment lacked an open market; attempted sales to other boards had failed and dismantling would destroy its value. The mitigation objection therefore failed. (¶ 60–61)
- Commencing installation despite incomplete lists, in the circumstances of this project, did not establish waiver of the right to complain about the distributor’s failure to provide locations. (¶ 62)
- Amendments sought eight years after the section 34 petition and three and a half years after the appeal were highly belated and rightly rejected. (¶ 64)
Result
Appeal dismissed with costs; the arbitral award and the High Court’s refusal to interfere remained upheld.