Authority: High Court of Judicature at Madras

Order Date: 11.11.2026

Case Overview

  • Petition: Original Petition No.680 of 2019 and Application No.4013 of 2024 filed by M/s. Appu Hotels Ltd against M/s. Voltas Limited under Section 32(2) of the Arbitration and Conciliation Act, 1996, seeking to set aside the arbitral award dated 01.03.2019.
  • Underlying contract: Work order dated 11.05.2009 for supply, installation, testing and commissioning of HVAC and electrical systems for the proposed Le‑Meridien Hotel, Coimbatore, valued at Rs 11.80 crore, with an eight‑month completion period.
  • Amendments to the work order were executed on 21.05.2010, 23.05.2020, 20.08.2010, 19.10.2010, 21.10.2010 and 03.04.2011.
  • Dispute arose over completion, abandonment, final billing, retention amount (10 %), and compensation for third‑party work engaged by Appu Hotels.
  • Voltas invoked arbitration on 18.09.2013; the sole arbitrator was initially Justice A.S. Venkatachalamoorthy (Retd), later substituted by Justice G.M. Akbar Ali (Retd) on 08.01.2016. Arbitration conducted under Madras High Court Arbitration Centre rules.
  • Voltas claimed Rs 4,53,76,310 (invoice dated 20.07.2011) plus Rs 5,02,74,645 interest at 24% p.a. up to 29.02.2016, totaling Rs 9,56,50,775, and a retention amount of Rs 1,34,84,844 plus interest Rs 1,21,29,710, total Rs 2,56,14,554.
  • Appu Hotels counter‑claimed Rs 77,11,487 excess payment, Rs 52,68,610 liquidated damages, and Rs 34,50,00,000 for loss, inconvenience and hardship, each with 24% interest.
  • The arbitrator framed twelve issues covering breach, completion, retention, damages, limitation, and interest.
  • After evaluating evidence, the arbitrator determined the total value of work as Rs 11,28,20,374, deducted Appu Hotels’ third‑party expenditure of Rs 1,12,82,037, arriving at Rs 10,15,38,337 for Voltas. Payments already made amounted to Rs 7,59,87,285, leaving a balance of Rs 2,55,51,052 payable to Voltas, plus a retention amount of Rs 1,01,53,833. Interest was awarded at 18% per annum from the date of award until realization.

Final Outcome

  • The Court partially allowed the petition:

(i) The award portion granting Rs 1,01,53,833 retention amount with interest is set aside and severed.

(ii) The award of Rs 2,55,51,052 balance payable to Voltas, together with 18% post‑award interest, is upheld.

(iii) Each party bears its own costs.

(iv) Any pending applications are closed.

Topics: Arbitration, Retention Payment, Court Intervention