ONGC vs. SAW PIPES LTD. : Landmark Case Law of Section 73, 74, 55 Indian Contract act and Section 34 of Arbitration act
ONGC VS SAW PIPES LTD. CIVIL APPEAL 7419/2001 The company Saw pipes came into a contract with ONGC for the supply of pipes. Due to sudden labor strikes was happened in all over the European continent that cause Saw pipes ltd. failed to transfer the product on time to their client ONGC. So, Saw pipes ltd. requested to the ONGC for extension the time period for delivery the same. There was a clause in the contract that stated- for delay of every week the contractor will be charged 1% of the whole unit price of the order or the part which the contractor has failed to deliver and these liquidated damages can be recovered up to the ceiling limit of 10% of the whole price of the unit. It has also been agreed by the parties that the stipulated liquidated damages are genuine, pre-estimated, not in the form of penalty, and can be deducted from the bill of the payment. Saw pipes ltd. (respondent) had caused the delay and when the ONGC (appellant) withheld the US $ 3, 04,970.2...