LL-16 Plaintiff.

1ST NATIONAL ADR TOURNAMENT, 2022 TEAM CODE: LL-16
TABLE OF CONTENTS
1ST NATIONAL ADR TOURNAMENT, 2022

IN THE INDIAN DISPUTE RESOLUTION CENTRE
AT NEW DELHI, INDIA
IDRC ARBITRATION No.____/2022
IN MATTER CONCERNING THE CONTRACT DATED 27TH APRIL 2019

BETWEEN
PRIME CONSTRUCTIONS PVT. LTD. CLAIMANT
v.
ANTYLIA CERAMIC PVT. LTD. RESPONDENT
-MEMORIAL ON BEHALF OF THE CLAIMANT-
Memorial behalf of CLAIMANT

i
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS………………….…………………………………………………ii
LIST OF
ABBREVIATIONS……………………………………………………………….iii
INDEX OF AUTHORITIES...……………………………………………………………..iv
a. Cases Cited …………………………………………………………………………..iv
b. Books and Treatises …………………………………………………………………..v
c. Dictionaries and Law Lexicons ……………………………………………………vi
d. Legal Databases ……………………………………………………………………..vi
e. Legislations …………………………………………………………………………..iv
STATEMENT OF JURISDICTION..……………………………………………………..vii
STATEMENT OF FACTS.………………………………………………………………viii
STATEMENT OF ISSUES.………………………………………………………………viii
SUMMARY OF ARGUMENTS..…………………………………………………………xi
ARGUMENTS ADVANCED....…………………………………………………………….1
Issue 1: WHETHER THE UNILATERAL DECISION OF USING A SUPERIOR
ALTERNATE CEMENT AMOUNTS TO RECKLESSNESS OR LACK OF DUE
CARE BY THE CLAIMENT?......……………………………………………………….1
a. What impact is the current scenario having?..............................................................
b. Action taken in good faith & not to harm the other party………………………….
Issue 2: WHETHER THE PARTIES TAKE AN UNCALLED TANGENT OUT OF
THE CONTRACT RESULTING IN ITS BREACH?..………………………………….5
a. What was the essence of the Principal Contract entered on 27th April 2019?.........
b. Was it possible to honor all the terms of the contract by the Claimant?..................
c. The doctrine of Supervening Impossibility…………………………………………
Issue 3: WHETHER THE CLAIMS ENFORCE ARBITRARY OBLIGATIONS ON
PRIME CONSTRUCTION PVT. LTD?...................………………………………….10
a. Amount claimed is not in consonance with the Doctrine of Frustration………
b. Impossibility of the contract- a ground for invalidation of claims by Respondent…
PRAYER.……………………………………………………………………………………15

ii
LIST OF ABBREVIATIONS
LIST OF ABBREVIATIONS
AIR All India Reporter
All Allahabad
ALR Arbitration Law Reporter
Cal Calcutta
Cr. LJ Criminal Law Journal
Del Delhi
IC Indian Cases
Mad Madras
Ori Orissa
SC Supreme Court
SCJ Supreme Court Journal
SCR Supreme Court Reporter
§ Section
UKHL United Kingdom House of Lords
TLR Times Law Reporter
QB Queen’s Bench
EWHC England and Walse High Court
MYS Mysore
J&K Jammu & Kashmir

iii
INDEX OF AUTHORITIES
A. LEGISLATIONS
1. ARBITRATION AND CONCILIATION ACT, 1996
2. IDRC DOMESTIC ARBITRATION RULES, 2019
3. INDIAN CONTRACT ACT, 1872
B. CASES CITED
INTERNATIONAL CASES
1. Anglo Mexican Petroleum Products Co. Ltd., (1916)2 AC 397
2. Davis Contractors Ltd v. Fareham Urban District Council, [1956] UKHL 3
3. Krell v. Henry, 19 TLR 711
4. Ocean Tramp Tankers Corporation v. VIO Sovfracht, [1964] 2 QB 226
5. Taylor v. Caldwell, [1863] 3 B&S 826
6. Berkeley Community Villages Ltd and another v Pullen and others, [2007] EWHC
1330 (Ch)
SUPREME COURT CASES
1. Alopi Parshad and Sons Ltd. Vs Union of India, AIR 1960 SC 588
2. Ganga Saran v. Ram Charan Ram Gopal, 1952 SCR 36
3. Naihati Jute Mills Ltd. Vs Khyaliram Jagannath, AIR 1968 SC 522
4. Sushila Devi Vs Hari Singh, AIR 1971 SC 1756
HIGH COURT CASES
1. Association Of Unified Telecom Service Providers of India & Ors v. UOI & Ors,
WP(C) NO. 3673/2010
2. Dhadi Dalai V. Basudeb Satpathy & Ors, AIR 1961 ORI 129
3. Dhadi Dalai vs Basudeb Satpathy and Ors, AIR 1961 ORI 129
4. Easun Engineering Co Ltd v. Fertilizers and Chemicals Travancore Ltd, AIR 1991
Mad 158
5. G.A. Galia Koytwala and Co. Ltd. Vs K.R.L. Narsimhan, AIR 1954 Mad 119 (DB)
6. H.C. Rajan Vs C.N. Gopal, AIR 1961 Mys 29 (DB)
7. Hamara Radio and General Industries Ltd. Co. Vs State of Rajasthan, AIR 1964
Raj 205
iv
8. Hari Singh Vs Deewani Vidyawati, AIR 1960 J&K 91

9. Harnandrai Fulchand v. Pragdas, (1920) 22 BOMLR 343
10. Kanshi Ram v. Ishwardas, AIR 1923 Lah 108
11. Lal Mohan Ghosh Vs Ramanath Shaha, AIR 1954 Tri 17
12. Man Singh v. Khazan Singh, AIR 1961 Raj 277
13. Ram Kumar Vs P.C. Roy & Co., AIR 1952 Cal 335
14. Sachindra Nath v. Gopal Chandra (AIR 1949) CAL 240
15. Tata Motors Ltd. vs State, CRL.REV. P. 16/2008 & CRL.M.A. No. 4301/2008
16. The Food Corporation of India v. M/s. Anup Trade and Transport, Case No.: WA
36/2020
C. BOOKS AND TREATISES

1. AVTAR SINGH, LAW OF CONTRACT & SPECIFIC RELIEF ([FIFTH EDITION,
REPRINTED], EBC PUBLISHING (P) LTD., LUCKNOW, 2018)
2. (DR) J. N. PANDEY, LAW OF TORTS ([NINTH EDITION], CENTRAL LAW
PUBLICATIONS, ALLAHABAD, 2018)
3. M. KRISHNAN NAIR, THE LAW OF CONTRACTS ([FIFTH EDITION, REPRINTED],
ORIENT LONGMAN PRIVATE LIMITED., HYDERABAD, 2004)
4. B. S. RAMASWAMY, CONTRACTS AND THEIR MANAGEMENT ([FIFTH EDITION],
LEXISNEXIS, 2016)
5. P. S. ATIYAH, STEPHEN A. SMITH, INTRODUCTION TO THE LAW OF CONTRACT
([SIXTH EDITION], OXFORD UNIVERSITY PRESS., 2019)
6. G. C. V. SUBBA RAO, LAW OF CONTRACTS I & II ([ELEVENTH EDITION, REPRINTED],
NARENDER GOGIA & COMPANY., HYDERABAD, 2017)
7. DR. S. C. TRIPATHI, ARBITRATION & CONCILIATION ACT, 1996 ([EIGHTH EDITION,
REPRINTED], CENTRAL LAW PUBLICATIONS., M/S. UNIVERSAL BOOK TRADERS.,
DELHI, 2019)
8. AVTAR SINGH, LAW OF ARBITRATION & CONCILIATION AND ALTERNATIVE DISPUTE
RESOLUTION SYSTEMS ([TENTH EDITION], EBC PUBLICATIONS (P) LTD., LUCKNOW,
2020)
9. HAROLD CROWTER, INTRODUCTION TO ARBITRATION ([FIRST PUBLISHED, 1998]
REPRINTED, L. L. P. LIMITED., 2020)

v
10. O. P. CHADHA, ALR’S COMPENDIUM OF ARBITRATION AND CONCILIATION ACT,

1996 ([SECOND EDITION], ARBITRATION LAW REPORTER, DELHI, 2017)
D. DICTIONARIES AND LAW LEXICONS

1. HENRY CAMPBELL BLACK, BLACK’S LAW DICTIONARY, BRYAN A. GARNER, ([ED.
11TH], THOMSON REUTERS)
2. N. SAHA, MITRA’S LEGAL AND COMMERCIAL DICTIONARY, ([ED. 5TH],
EASTERN LAW HOUSE, CALCUTTA,1990)
3. P. RAMANATHA AIYER, ADVANCED LAW LEXICON, ([ED. 5TH], LEXIS NEXIS, 2016)
4. VICTORIA NEUFELDT, WEBSTER’S NEW WORLD COLLEGE DICTIONARY, ([ED. 3RD],
MACMILLAN, USA)
5. PAUL MACMAHON, GOOD FAITH AND FAIR DEALING AS AN UNDERENFORCED
LEGAL NORM, MINNESOTA LAW REVIEW, 99 (6), ISSN 0026-5535 (2015)
E. LEGAL DATABASES
1. Lexis NEXIS
2. MANUPATRA
3. SCC ONLINE
4. WESTLAW

vi
STATEMENT OF ISSUES
SSTATEMENT
TATEMENT O
OFF JJURISDICTION
URISDICTION
THE CLAIMANT IN THE PRESENT CASE, PRIME CONSTRUCTION PVT. LTD., HUMBLY SUBMITS
THIS MEMORIAL IN PURSUANCE OF THE MUTUALLY AGREED ARBITRATION CLAUSE OF THE
PRINCIPAL CONTRACT DATED 27TH APRIL 2019, EXECUTED BETWEEN PRIME CONSTRUCTION
PVT. LTD. AND ANTYLIA CERAMIC PVT. LTD., CLAIMING THE DENIED CONSIDERATION AND
CONSTRUCTION MATERIAL COST TO THE INDIAN DISPUTE RESOLUTION CENTRE, DELHI TO BE
COMMENCED UNDER ARTICLE 4 OF THE IDRC DOMESTIC ARBITRATION RULES, 2019.

vii
STATEMENT OF ISSUES
STATEMENT OF FACTS
BACKGROUND
(¶1) With international investors on board, Prime Constructions Pvt. Ltd. (hereinafter
referred to as “Prime Constructions”) is one of the leading companies undertaking
construction processes in venues including New Delhi. It has a history of providing state-of-
the-art buildings through the 35 years of experience it gathered in this industry. It is an
undisputed fact, through the success of this company, that their methods of construction and
decision-making have a sound rationale behind them.
(¶2) It is important to consider that Prime Constructions has maintained a very good financial
record throughout its tenure. The fact that they could sustain their records throughout the
financial crisis in Delhi was a great display of their stability in the market.
(¶3) In a previous collaboration between the Claimant and Antylia Ceramics Pvt. Ltd.
(hereinafter referred to as “Antylia Ceramics”), the respondents, in this case, the parties
completed a two-year-long contract where the Claimant constructed a building for the
respondents in Delhi.
SUBJECT MATTER
(¶4) The present issue is regarding the second project between the same parties which was to
be constructed in Mumbai. Post an extensive negotiation of contracts prolonging from
September 2019 to April 2019, being convinced with the negotiations, and the offers being
provided by Prime Construction, the parties finally entered into a contract on 27th April
2019 for the construction of a facility including office, warehouse, and production spaces-
covering a total space of 2285m2 out of the 5000 m2 of land owned by the respondents at
Peddar Road.
(¶5) From April to August 2019, the Claimant worked on procuring and complying with all
regulations of the local jurisdiction of Mumbai. The project is extremely important for the
company to have its roots grounded in the market of Mumbai and hence, utmost priority was
given to the same.
(¶6) The contract agreed to have clauses stipulating the consequences of delays. It stated that
a delay of a month will call for a penalty of INR 10,00,000/-. This was an amount the
Claimant could not afford to lose out on. Therefore, necessary steps were taken to not only
expedite the process but also to ensure that the quality demanded was being adhered to.

viii
STATEMENT OF ISSUES
CONFLICT
The construction went smoothly and efficiently until October 2019, owing to labor unrest
within Ultra Dalmia and hence, calling for a halt in production for around 5 weeks. As a
proactive method, the Project manager of the Claimant, Mr. Rishabh Pandya approached
Ultra Dalmia to get a confirmation of the delay expected. This was duly communicated to the
General Manager, Mr. Dravid Ganguly, Antalya Ceramics. The General manager for the
respondents approved the delay with a condition that no further delays would be accepted.
This clear directive was adhered to by the Claimant and hence, a decision to recommence the
work as soon as the stocks replenish was taken.
(¶8) Unfortunately, during this period of delay, on 30th November 2019, Ultra Dalmia
released another statement indicating a delay of 6 months, owing to a fire in their plant and
the warehouse as a result of which, their production house was destroyed. To comfort their
clients, Ultra Dalmia sent an apology and asked their customers about their decision to stick
with Ultra Dalmia and wait out the 6 months of delay.
(¶9) This was the root of the issues. Prime Construction, based on the latest and recent
communication with the General Manager of Antylia Ceramics, decided to take a unilateral
decision in good faith and substitute the cement being used with a superior quality cement
and incurring marginally higher costs while they do so. The substitute was used from the start
of December 2019.
(¶10) As soon as Antylia realized that there was a substitute cement being used, they released
an official statement that they felt cheated and hence, would prefer halting all construction
projects with Prime Constructions. By then, Prime Constructions had already completed the
first stage of the project worth INR 10,00,00,000/-, and approximately 95% of the second
stage worth INR 21,50,00,000/-. Furthermore, the Claimant had hired construction
equipment and had bought bulk construction materials to prevent any delays in the stages
lying ahead. A total cost of INR 30,00,00,000/- was incurred by them including the second
stage costs, which are being seeked by Prime Construction as compensation for bringing the
contract to an end abruptly.
(¶11) The respondent denied any further payments and also seeked compensation of INR
45,00,00,000/-, dragging Prime Construction into dire economic distress for the first time in
its history. The suit, therefore, is in this regard, for the arbitrator to award.
(¶12) The property was reacquired from the Claimant by Antylia Ceramic on 03.08.2020.

ix
STATEMENT OF ISSUES
STATEMENT OF ISSUES
ISSUE: 1
WHETHER THE UNILATERAL DECISION OF USING A SUPERIOR ALTERNATE CEMENT
AMOUNTS TO RECKLESSNESS OR LACK OF DUE CARE BY THE CLAIMANT?
a. What impact is the current scenario having?

b. Action taken in good faith & not to harm the other party
ISSUE: 2
WHETHER THE PARTIES TAKE AN UNCALLED TANGENT OUT OF THE CONTRACT
RESULTING IN ITS BREACH?
a. What was the essence of the Principal Contract entered on 27th April 2019?
b. Was it possible to honor all the terms of the contract by the Claimant?
c. The doctrine of Supervening Impossibility
ISSUE: 3
WHETHER THE CLAIMS ENFORCE ARBITRARY OBLIGATIONS ON PRIME CONSTRUCTION
PVT. LTD.?
a. Amount claimed is not in consonance with the Doctrine of Frustration

b. Impossibility of the contract- a ground for invalidation of claims by Respondent

x
SUMMARY OF ARGUMENTS
ISSUE 1
It is requested, that Prime Constructions did the act in good faith and that no ill intention or
motive was behind it. As seen from the facts of the case, there was a smooth and quick
running of the agreement until and unless the unforeseen situation from the Ultra Dalmaia
concrete came forward. As one of the projects was complete and the second was on the verge
of completion, hence the Construction Company in the best interest of both took the decision
of continuing the project. For the purpose of completion, it even bought a much superior
quality of concrete which was relatively more expensive than the other, and choose to
proceed. As there was no contention of causing any harm, the party shouldn’t be liable for
any damage. Also as Prime Construction already has a good image, there is no reason for it to
destroy by doing some wrongful act, in this case, good faith plays a relevant factor here and
should be considered by other party.
ISSUE: 2
Given the impossibility of the Principal Contract that arouse out of the unforeseen
circumstances of the fire incident that took down the Ultra Dalmia production house. It was
unreasonable for the Claimant to wait for another 6 months, as the Production house
suggested that they would not be able to supply for 6 months. If the Claimant have had
waited for so long, that would have directly breached the essence of the Principal Contract
which was Time. The Claimant, had no control over time, but had control to find alternative
material which was in fact superior to Ultra Dalmia. Since, it was impossible to procure Ultra
Dalmia at this stage. The part of performance of the contract with Ultra Dalmia amounts to
frustration, making that part of the agreement invalid. Therefore, there was no Breach on the
Claimant’s side.

xi
ISSUE: 3
PVT. LTD.?
The claimant has ensured adherence to two of the essential elements of the contract, which
commenced on 27 April 2019. Adherence to the time limits and the use of the Ultra Dalmia
cement, are two of the most important aspects that starved fulfilment. It is submitted that on
second instance of halt of supply, as the waiting period exceeded the threshold that the
claimants could complete the project without incurring penalties of INR 10,00,000 per
month, a unilateral decision to use a better-quality cement with a marginally higher cost was
taken by the Claimants under good faith. The breach of contract being initiated comes with a
claim of INR 45,00,00,000 which is an absurd amount, considering the fact that the
respondent denied payments for the second stage of work, which was 95% complete.

xii
ARGUMENTS ADVANCED
ISSUE 1
ARGUMENTS ADVANCED
ISSUE 1
(¶1) Many nations acknowledge the need to engage into and carry out agreements in good
faith. Acting in good faith requires the parties to follow acceptable commercial norms of fair
dealing in line with their activities connected to the agreement, as well as faithfulness to the
agreed-upon shared aim and uniformity.1
(¶2) Within the sphere of contract law, parties having adequate freedom to determine how to
fulfill and prosecute their reciprocal commitments is an inevitability. And if there is
discretion, there is a significant threat that it will be used for self-interest or opportunism. As
a result, lawmakers and judicial authorities have devised several interpretative & theories to
oppose and regulate self-interested behavior on the side of contractual parties.
The implicit responsibility of good faith and fair dealing is amongst the most essential of
these concepts.2
What impact is the current scenario having?

(¶3) In the current scenario, the project ran smoothly and effectively until October 2019,
when worker unrest within Ultra Dalmia caused a 5-week pause in output. Mr. Rishabh
Pandya, the claimant's project manager, sought Ultra Dalmia as a preemptive measure to
clarify the estimated delay. This was duly notified to Antalya Ceramics' General Manager,
Mr. Dravid Ganguly. The respondents' general manager allowed the postponement on the
proviso that no more extensions be granted. The claimant followed this explicit direction, and
as a result, a decision was made to resume work as soon as the stocks were replenished.
(¶4) However, Ultra Dalmia issued additional declaration on November 30th, 2019,
suggesting a 6-month break due to a fire in their plant and warehouse, as a consequence of
1
Berkeley Community Villages Ltd and another v Pullen and others, [2007] EWHC 1330 (Ch)
2
Paul MacMahon, Good Faith and Fair Dealing as an Underenforced Legal Norm, Minnesota Law Review, 99
(6), ISSN 0026-5535 (2015)
1
ARGUMENTS ADVANCED
ISSUE 1
which their production house was damaged. To reassure its consumers, Ultra Dalmia emailed
an apology and inquired about their decision to stay with Ultra Dalmia and put through the 6-
month postponement.
(¶5) This was the foundation of the difficulties. Prime Construction chose to take a voluntary
choice in good faith, relying on the most recent contact with the General Manager of Antylia
Ceramics, and replace the cement being used with a higher-grade cement, incurring
significantly greater expenses in the process. The replacement was utilized beginning in
December 2019.
Action taken in good faith & not to harm the other party:
(¶6) Here, it is evident that no mala-fide intentions were there, and only in good faith, the
replacement of the cement was done. The Indian Contract Act of 1872 makes no explicit
reference to the idea of good faith (hereinafter referred to as the "Act"). Certain laws, though,
require parties to behave in good faith. For example, if one person engages another to
perform an act, and the agent performs the act in good faith, the employer is obligated to
indemnify the agent for the effects of that conduct, even if the act injures the rights of third
parties.3
(¶7) Through its various implementations, the idea of good faith is extensively relevant. The
idea is not even limited to contracts, but may be found in any other legislation where a party
must be indemnified. The notion, like any other principle, has evolved over time thanks to the
essential contributions of historians and legal academics. However, following thorough
examination of the concept, it is unnecessary to assert that the principle is left to the people's
interpretation. In every other respect, the concept is supported by Indian law. The idea is
profoundly established in the Indian legal system, whether as contract law or insurance law.
However, because the concept is not yet precisely defined and is left to the interpretation of
the court, it might be abused and squandered by the judge's discretionary powers. Thus, when
deciding a case, the facts of the matter, the theory of good faith should be used and construed
correctly.
3
Section 166 of the Indian Contract Act: Bailee not responsible on re-delivery to bailor without title. —If the
bailor has no title to the goods, and the bailee, in good faith, delivers them back to, or according to the directions
of, the bailor, the bailee is not responsible to the owner in respect of such delivery.
2
ARGUMENTS ADVANCED
ISSUE 1
(¶8) In The Food Corporation of India and 4 vs M/S. Anup Trade and Transport4, the court
said that “Before parting with the judgment, we may add that every contract agreement
inheres in itself the principle of "Good Faith". The concept of "good faith" had its origin in
Roman law. It was extensively used in the Roman Empire and is used in facilitating
interpretation in positive law and for imparting of justice. The term "good faith" implied
trustworthiness, conscientiousness and honorable conduct. After the Roman Empire, the
doctrine of "good faith" was slowly adopted in the common law system. Classically the
application of "good faith" doctrine was minimal in the common law system. However, since
the recent past the doctrine of "good faith" has been developed by legal system across the
world. In the United States every conduct or duty under uniform commercial code imposes an
obligation of "good faith" in its performance and enforcement, as in the United States there is
requirement of statutory adherence to this doctrine of "good faith". The doctrine of "good
faith" is not considered as an independent source of duties for the parties to a contract. But it
is used as an aid in the construction and interpretation of the expressed terms. The doctrine of
"good faith" and fair dealings should be used to fill up the gaps in a contract between the
parties and maintain the equilibrium in the contract agreement between the parties.”
(¶9) In Association of Unified Telecom v. UOI & Ors. 5

it was contended that, “Every
contract contains an implied covenant of good faith and fair dealing, obligating the
contracting parties to refrain from doing anything which will have the effect of destroying or
injuring the right of the other party to receive the fruits of the contract. “We venture to assert
that when the history of the financial era, which preceded liberalization and privatization,
would be written, and the mistakes committed would be scripted, a major fault would be the
failure to apply the fiduciary principle of every contract containing an implied covenant of
good faith and fair dealing because in every contract each party reposes trust and confidence
in the other, that each would refrain from doing anything which will have the effect of
destroying or injuring the right of the other party to receive the fruits of the contract.
4
The Food Corporation of India v. M/s. Anup Trade and Transport, Case No.: WA 36/2020
5
Association Of Unified Telecom Service Providers of India & Ors v. UOI & Ors, WP(C) NO. 3673/2010
3
ARGUMENTS ADVANCED
ISSUE 1
(¶10) In the case of Tata Motors Ltd. vs State6, the court stated that, a review of the
contested order reveals that the learned MM has not only considered the facts of the
complaint, but has also surpassed his authority in determining whether the respondents would
have a competent defence under the theory of "good faith.” The learned MM in particular has
observed as under:
The writer's goal does not appear (sic appears) to be to slander and hurt the
complainant's image. The piece has no hint of malice. In the context, the phrases 'Blood
vehicle' and 'War Zone' simply appear to be 'exaggeration,' which does not indicate that the
statement is unjust, especially where it appears to be made in good faith and for the
preservation of the public interest. In the facts, no cognizance of the offences may be taken on
the basis of the accusations because no prima facie case has made out.7
(¶11) In Dhadi Dalai V. Basudeb Satpathy & Ors8, Mr. Mohanty for the appellant sought to
urge that even though defendant No. 1 might have no notice, actual or constructive, of the
earlier contract for sale, he did not act in good faith, which is one of the conditions laid down
under Section 27 (b) of the Specific Relief Act, for supporting the sale. The very
circumstances which the trial Court relied upon for holding that there was a, case of
constructive notice, were relied upon by Mr. Mohanty, to indicate that defendant No. 1 did
not purchase the property in good faith. It has been held in Kanshi Ram v. Ishwardas,9
"Where the consideration is paid in full and the vendees are ignorant of the original contract,
good faith must be presumed in the absence of evidence to the contrary." In this case,
defendant No. 1 pledged his own oath that he had no notice of the earlier agreement for sale,
and no apparent justification has been indicated to disbelieve the said denial. If by any
positive act he was to prove his honesty of intention, he has established that he made
enquiries from the registration office about any existing incumbrance, and he further got the
suit land identified by an amin, prior to the purchase. So, the contention, that the purchaser
has not been able to discharge the onus, has to be rejected.10
6
Tata Motors Ltd. vs State, CRL.REV.P. 16/2008 & CRL.M.A. No. 4301/2008
7
In the High Court of Delhi at New Delhi, Tata Motors ltd. (petitioner) versus State (respondent)
8
Dhadi Dalai V. Basudeb Satpathy & Ors, AIR 1961 ORI 129
9
Kanshi Ram v. Ishwardas, AIR 1923 Lah 108
10
Dhadi Dalai vs Basudeb Satpathy And Ors. on 20 September, 1960 Equivalent citations: AIR 1961 Ori 129

4
ARGUMENTS ADVANCED
ISSUE 2
ISSUE 2
(¶12) The Claimant in this present case intends to argue on the very fact of the principal
contract dated 27th April 2019 that the act done by the Claimant was perfect in pursuance of
the same contract; therefore, any of the Claimant’s acts do not amount to the breach of
contract. This issue aims to identify the core intention of the Claimants to have deviated from
one of the elements of the contractual agreement; however, the act was done in furtherance of
the contract. The previously argued issue establishes the intention of the Claimant that his
acts were in consonance with the functionality of the contract and were not with the intent to
conclude the contract in a reckless manner. The Claimant urges this tribunal to highlight the
loss suffered to him by the unappreciated penalty by the Respondents.
(¶13) The Claimant had previously worked for the Respondents in one of their construction
projects, and this is the second time they are working from the Respondent. In lieu of their
previous relationship, and the intense negotiation as agreed upon by both parties, the
Claimant was under the utmost duty to honor the contract in the best manner possible.
However, in the event of impossibilities, when two prime elements of the contracts contradict
each other, the Claimant was not in the position to fulfill both of his agreed obligations.
Furthermore, in the event where the Claimant still pushed the performance of the contract
towards the risk to fulfill both of his obligations, it was for certain one of the two obligations
would have suffered a breach for certain, as the latter term is under question by the
Respondent.
(¶14) The Contract entered upon by the Claimant, and the Respondent on 27th April 2019
highlighted two major aspects of the contractual agreement those are the material used and
the Time limit. The Respondents were clear and persistent in using the best quality material
for their construction, and according to their research, they found out that “Ultra Dalmia” was
the best material in the market. Since the Claimant has been in the construction industry and
has had a specialization in the specific industry, it is better to say that the Claimant has
always had a superior hand on the material used in the construction business. Yet, not defying

5
ARGUMENTS ADVANCED
ISSUE 2
the wishes of the Respondent, agreed to work upon the execution of the contract. There is no
doubt that there was an acceptance of an absolute nature. The Claimant does not suggest to
have never agreed to supply the material for construction. However, the unforeseen
circumstances forced the Claimant to act promptly and select the better alternative which was
rather superior to what the Respondents had wished for.
What was the essence of the Principal Contract entered on 27th April 2019?
(¶15) The Contract entered on 27th April 2019 between the Claimant Prime Constructions
and Antylia Ceramic was for the construction of the new site for the respondent who had in
his hand the possession of 5000m2 land which was situated in Peddar Road. Now, the
Respondent has been searching the market to look for Constructors who can provide them
with a better offer. The Respondent had been 2018 looking for the perfect material according
to their quality. Its Management Board had reviewed several products available in the market,
and as per their understanding, Ultra Dalmia concrete received the highest rating. This is why
Ultra Dalmia was consistently in the mind of the Respondent as the key ingredient for their
construction. For 8 months, starting from September 2018 to April 2019, both parties
negotiated the terms of the construction agreement.
(¶16) The contract on the other hand expressly mentioned the time-boundness of the
agreement and performance of the contract. The entire construction process and the final
handover of the premises to the Respondent were to be done specifically in the period of 30
months. Now, the time during as mentioned by the Respondent was quite hectic for the
Claimant to cover. And on top of this clause, the Respondent had also included in the contract
the penalty amount of INR 10,00,000/- per month for any delay whatsoever. The Claimant
did not waste any time and began the work immediately.
Was it possible to honor all the terms of the contract by the Claimant?
(¶17) The Claimant started the force in complete force since the very day when the contract
was entered into. The work was running smoothly and rather effectively in accordance with
the time schedule until the construction of the project witnessed a hault. This happened in
October 2019 when the concrete supply Ultra Dalmia’s production got halted due to labor
unrest. Since the Claimant had previously worked with Ultra Dalmia, they were able to
establish personal contact with the concrete production company. However, the company
6
ARGUMENTS ADVANCED
ISSUE 2
confirmed and seeked an apology from the Project Manager of the Claimant Mr. Rishabh
Pandya that the minimum time required for the concrete company to restart their production
and restore the supply was approximately 5 weeks. The Claimant had been in the industry
and had better knowledge about the superior substitute available in the market. If they had the
reckless intention and the urgency to complete the project without exercising due care, they
could have violated the contract then and there, picking up a better alternative. But they
didn’t because 5 weeks was something, the Claimant thought, a wait could suffice the
performance. When on 21st October 2019, the project manager communicated the same to
the Respondent, they agreed to wait for 5 weeks, but expressly specified that they would not
entertain any further time delay whatsoever.
(¶18) As the parties waited, the Claimant was informed of a fire incident in Ultra Dalmia’s
plant, for which the company was not in the position to supply orders for the next 6 months.
This was something unforeseen. Now, in this case, the Claimant could never complete the
project in the strict time limit if they waited for Ultra Dalmia, especially when the
Respondent had given the strict mention of not appreciating any further delay. Furthermore,
the wait of 5 weeks to 6 months is not compared. Such a wait would land the Claimant with a
penalty amount of INR 60,00,000/-. Therefore, it was impossible for the Claimant to honor
both the essence of the contract, the material, and the time specification.
The doctrine of Supervening Impossibility

(¶19) The idea of supervening impossibility is also known as the doctrine of frustration, and
it is one of the characteristics of contract law. It addresses the enforceability of contracts in
the event of certain unforeseeable events. The term 'frustration' denotes 'ineffective efforts,'
and it is one of the ways a contract can be discharged under Section 56 of the Indian Contract
Act, 1872. When a contract becomes difficult to perform due to unforeseeable circumstances
beyond the control or calculation of the parties concerned, the doctrine of supervening
impossibility or the doctrine of frustration applies. When such a contract becomes completely
unworkable due to no fault of the parties, the contract is dissolved. This doctrine is founded
on the adage 'Lex non cogit ad impossibilia.' The maxim basically states that "the law does
not compel the impossible."
Herein, the fire was unforeseen and neither of the party was in the position to foresee or take
precautionary measures in any manner to continue the supply. The case of Taylor v.
7
ARGUMENTS ADVANCED
ISSUE 2
Caldwell11 is the landmark case on impossibility of contract. In this case, an opera theatre
was booked for concert purposes. However, the opera house was destroyed by fire before the
event. Blackburn J concluded that when a contract is frustrated, it is discharged because the
discharge of the contract might be considered an implied term that the parties consented to
upon the occurrence of the uncertain events. This is known as the implicit term theory.
(¶20) In Krell v. Henry12, it was determined that when an express condition or state of things
fundamental to a contract ceases to exist, the contract becomes impossible to perform, and the
law of frustration applies. The contract is discharged in the case of Ocean Tramp Tankers
Corporation v. VIO Sovfracht13 when a fundamentally new situation emerges that renders it
unreasonable and unjust to hold the parties accountable to perform their commitments. Lord
Radcliffe developed a theory called the Construction Theory, where he said when a new
circumstance arises which is different from what the parties had anticipated for performing
the contract, the doctrine of frustration would apply.14
(¶21) In Section 56 of the Indian Contract Act of 1872, the word "impossible" is not used in
the sense of physical or literal impossibility. The performance of an act may not be literally
impossible, but it may be impracticable and unless from the standpoint of the object and
which the parties had in mind; and if an untoward event or change of circumstances
completely upsets the very foundation upon which the parties rested their bargain, it can very
well be said that the promisor finds it impossible to perform the act which he promised to
do.15 If the fulfilment of a contract becomes unfeasible or worthless in light of the intention
and purpose that the parties had in mind, the contract shall be deemed impossible to perform.
However, the intervening incident must remove the basis of the contract and must be of such
a nature that it strikes at the heart of the deal.16
11
Taylor v. Caldwell, EWHC QB J1
12
Krell v. Henry, [1903] 2 KB 740
13
Ocean Tramp Tankers Corporation v. VIO Sovfracht, [1964] 2 QB 226
14
Davis Contractors Ltd v. Fareham Urban District Council, [1956] UKHL 3
15
Satyabrata Ghose Vs Mugneeram Bangur and Co., AIR 1954 SC 44
Anglo Mexican Petroleum Products Co. Ltd., (1916)2 AC 397
Hari Singh Vs Deewani Vidyawati, AIR 1960 J&K 91
H.C. Rajan Vs C.N. Gopal, AIR 1961 Mys 29 (DB)
16
Sushila Devi Vs Hari Singh, AIR 1971 SC 1756; Naihati Jute Mills Ltd. Vs Khyaliram Jagannath, AIR 1968
SC 522; Hamara Radio and General Industries Ltd. Co. Vs State of Rajasthan, AIR 1964 Raj 205
8
ARGUMENTS ADVANCED
ISSUE 2
(¶22) Therefore, in the light of the above-mentioned precedent, is it clearly understood that
the Claimant was in no position to fulfil all the obligation of the contract. The fire was an
unprecedented event, which neither party had control. Such being the case, it was no way
possible to honor the procurement of Ultra Dalmia concrete which is the subject matter
here17, as there was an impossibility to that aspect of the contract. However, the time was still
in the hands of the Claimant, which the latter could use efficiently, to honor the other essence
of the contract which was time. If Claimant had neglected the time aspect of the contract,
then there would have been a certain breach and negligence on the art of the Claimant;
however, Claimant to honor what was possible for the performance of the contract procured a
better and superior quality material and completed his side of the work in his capacity.
17
Lal Mohan Ghosh Vs Ramanath Shaha, AIR 1954 Tri 17
9
ARGUMENTS ADVANCED
ISSUE 3
ISSUE 3
PVT. LTD.?
(¶23) Time being the essence of the contract and the penalties imposed therein changed the
dynamics of the decisions being taken, by the Claimants, throughout the course of events
from the commencement of the contract on 27 April 2019, all the way to the alleged breach
of the contract. The non-payment of the agreed sum of INR 21,00,00,000/- for the completion
of the second stage, therefore, is arbitral and stands no legal validity. Following the
conversation between the Claimant, at the time being represented by the project manager, Mr.
Rajesh Pandya, and the respondent, Mr. Dravid Ganguly, it can clearly be ascertained that the
Claimant provided reasonable care towards two most important aspects of the contract,
negotiated from September 2019 to April 2019, till the commencement of the contract. These
two essentials are:
a. Completion of the project within 30 months from commencement of the contract
b. Use of Dalmia Cement throughout the construction process.
(¶24) The actions taken by the Claimant, therefore, are based on these factors that could
impact the completion of the project drastically. This impossibility has duly been discussed in
Issue 2 of the Claimant memorandum. Considering the fact that the circumstances for the
adherence to the contract were impossible in the time stipulation provided by the respondent,
the Claimant was forced to take the best action to evade the potential delay causing losses to
both sides. Therefore, all actions were also proven to be under good faith, through Issue 1.
Amount claimed is not in consonance with the Doctrine of Frustration

(¶25) Concepts such as the Doctrine of Frustration and the Doctrine of Impossibility hold
high relevance to the instant case. The Doctrine of Frustration brings forth the idea of
execution based on the present facts and circumstances. For sound reasoning of the instant
case, it may be highly relevant for the tribunal to look into the immediate circumstances, that
is, the burning down of the Ultra Dalmia production facilities and the pecuniary effect of time
on the Claimants. Applying the same doctrine, it may hold high value for the tribunal to learn
that the doctrine of frustration applies to the very object of the contract; and it must be

10
ARGUMENTS ADVANCED
ISSUE 3
recognized by both parties.18 As recognised earlier, there are two essentials that this contract
has had in effect. According to the Doctrine of Frustration, its application is inevitable in
cases where the performance of the contract is physically impossible.
(¶26) Under situations such as passing of a new government order19 can be valid grounds for
the application of the doctrine of Frustration. In the recently referred case, it was found that
mere absence of profits cannot be the reason for a side to claim immunity under the doctrine
of Frustration. In other words, the event that takes place must come out of a circumstance that
has no great relation with the objective of having the contract established between the parties
in the first place.
(¶27) Applying the law noticed in these precedents to the instant case, it can be determined
that the Claimants in the case went through an event which has no direct connection with the
objective of having established the contract. The alteration of events, that is, the breakout of a
fire in the premises of Ultra Dalmia, who is not a party to the principal contract, is not
directly or indirectly controlled by Prime Construction; and hence, is certainly in consonance
with the essentials of the Doctrine of Frustration.
(¶28) In another case between Ganga Saran and Ram Charan Ram Gopal, it was noticed
that as a result of some issues in the Mill, the supply to the respondents was interrupted as a
result of which, they pleaded frustration due to impossibility of the performance. In the said
case, it was declared by the Supreme Court that the respondents will not be able to take up
this defence given the fact that they could have procured a similar item from other sources,
and delivered it to the appellants.20 The Claimant in the instant case submits that had they
waited for the entire duration of six months, as prescribed by Ultra Dalmia, the latest referred
case, between Ganga Saran and Ram Charan Ram Gopal could possibly have been a
precedent for them and hence, would have made the Claimants liable for not acting in the
best interest of their client. It is important to be noted that in the referred case, it was the
object of the contract between the parties to have certain qualities of cotton irrespective of the
existence or non-functionality of the mill, which is quite similar to the situation that the
18
Taylor v. Caldwell, [1863] 3 B&S 826
19
Sachindra Nath v. Gopal Chandra, (AIR 1949) CAL 240
20
Ganga Saran v. Ram Charan Ram Gopal, 1952 SCR 36
11
ARGUMENTS ADVANCED
ISSUE 3
respondents created for the Claimants, by giving them strict guidelines about the timings,
supported by chronic penalisations. With such effects in force, it was imperative for the
Claimants in the instant case to make sure they follow the Supreme Court case of Ganga
Saran v. Ram Charan Ram Gopal in its full effect and to its best interpretations. To further
ascertain this judgement, it was also stipulated by the privy council through Harnandrai
Fulchand v. Pragdas21, that “Closing or even the destruction of the mills would not affect a
contract”. Meaning thereby that it is more important to make sure that the quality of the work
being done is adhered to in case there are any such circumstances that prevent the work to be
completed in the manner as it was prescribed in the contract.
(¶29) In another case between Man Singh and Khazan Singh22, the court held that the
contract between them was frustrated because of certain government regulations and
restrictions. The instant case has a huge relevance with the facts of the currently referred case
as well.
(¶30) It is very important for the tribunal to learn that the quality of materials used in the
instant case was higher than that of what was prescribed by Antylia Ceramic. Furthermore,
the price of this cement used is marginally higher than what was prescribed by Antylia
Ceramic. This means that Antylia has undertaken more losses already, well before the breach
was alleged by Antylia. The total sum of INR 45,00,00,000/- being claimed by Anylia
therefore, is absurd and does not pass the test of law under the Doctrine of Frustration.
(¶31) The doctrine of Frustration has been questioned multiple times internationally. It was
noticed in the case Krell v. Henry23 that the frustration doctrine applied at the very object of
contract. The term very object, in the case of the instant case between Prime Construction and
Antylia, was the completion of the project within 30 months. This means that anything that
stands in the way of non-completion of the project must be avoided under all circumstances.
The Claimant in the instant case took best steps to minimise the delay and to make sure that
the project gets delivered to the respondent within the stipulated time period and hence, make
sure they do not fall prey to the exuberant penalty clause incorporated by Antylia ceramic.
21
Harnandrai Fulchand v. Pragdas, (1920) 22 BOMLR 343
22
Man Singh v. Khazan Singh, AIR 1961 Raj 277
23
Krell v. Henry, 19 TLR 711
12
ARGUMENTS ADVANCED
ISSUE 3
It was noticed in the case of Easun Engineering Co Ltd v. Fertilisers and Chemicals
Travancore Ltd.24 by the Madras High court that Law must provide consideration for
massive price changes in the economy. Small changes can often be disregarded, which is also
the reason why Claimants disregarded the marginal increase in price while procuring the
better cement in absence of Ultra Dalmia. On the other hand, if the amount being claimed as
a result of an alleged breach is as high as INR 45,00,00,000, as decided in the latest referred
case, the performance of the contract becomes impossible.
Impossibility of the contract- a ground for invalidation of claims by Respondent

(¶32) Losses occurring to the impossibility of contract, or alterations to the situations as
noticed in the case in hand are a few of those circumstances that do not fall under the ambit
of §56 of the Indian Contract Act, 1872. In case of an impossibility of an act, under the
Indian Contract act, the entire contact is termed to be void. With the said clause in effect, the
Claimant’s in this case are entitled to be compensated for all expenses they have incurred
since the commencement of contract on the 27th of April, 2019.
(¶33) It is also important to be brought into the ambit of this proceeding that §56 when read
along with §65 of the Indian Contract Act, 1872, brings out the interpretation that it is the
obligation of the person who has received an advantage through a contract that is void (as
proved in preceding para) to compensate the person who has incurred a loss as a result of the
same. In the instant case, it can be determined that Antylia Ceramic has made significant
benefits by not making the payment for the second stage, where 95% of the work was already
completed; and also, for not initiating the payments for the preparations made by Claimant, to
commence the next stage of the work before the contract was terminated and project was
taken over by Antylia, on 3rd August 2020.
(¶34) A total loss of INR 30,00,00,000 was incurred by the appellant as a result of the
termination of contract, though the Claimant proposed completing the work for the
respondent multiple times. With all the facts in consideration, the present issue questioning
the absurd claims from the respondent can be summed up to have been answered. The
24
Easun Engineering Co Ltd v. Fertilisers and Chemicals Travancore Ltd, AIR 1991 Mad 158
13
ARGUMENTS ADVANCED
ISSUE 3
Claimant has been successful in enumerating the scope of the losses being incurred by them,
which has not been the case for the respondents who intend to seek a compensation of INR
45,00,00,000 on top of the non-payment of INR 30,00,00,000/- worth of work undertaken by
the Claimant. It is submitted that allowing such a claim will mean a total loss of INR
75,00,00,000/- which could potentially disrupt the well-kept financial records of Prime
Construction Pvt. Ltd., something that has never been the case in the history of the said
company. Allowing uch a claim will also enable the respondents to arbitrarily charge
compensation for a loss that they have not occurred and hence, destroy the essence of
Doctrine of Frustration from the root.25
(¶35) It was also stated in the case of Alopi Parshad and Sons Ltd. Vs Union of India26,
that the true construction of the contract is what needs to be taken into consideration; not the
circumstances that develop post construction of the contract. Furthermore, A contract's
discharge by frustration is not the consequence of a party's conduct or choice. However, the
presence of an already existing or supervening set of circumstances that exempted contract
performance amounts to an immediate dissolution of the contract that is not reliant on the
attitude of the contract's parties.27 The relevance of the arbitration procedures here are high. It
was noticed in the case of Naihati Jute Mills Ltd. Vs Khyaliram Jagannath by the Supreme
Court, that “The question as to whether the contract becomes impossible of performance and
was discharged under the doctrine of frustration would still have to be decided under the
arbitration clause which operates in respect of such purposes.”28
25
Ram Kumar Vs P.C. Roy & Co., AIR 1952 Cal 335
26
Alopi Parshad and Sons Ltd. Vs Union of India, AIR 1960 SC 588
27
G.A. Galia Koytwala and Co. Ltd. Vs K.R.L. Narsimhan, AIR 1954 Mad 119 (DB)
28
Naihati Jute Mills Ltd. Vs Khyaliram Jagannath, AIR 1968 SC 522
14
PRAYER
PRAYER
Wherefore, in the light of the facts of the case, issues raised, arguments advanced and
authorities cited, this Hon’ble court may be pleased to:
1. Declare that the uncalled decision to shift to a superior concrete arouse out of
impossibility of contract, thereby Claimant was not responsible for Breach of
Contract.
2. Grant the claimed consideration of INR 30,00,00,000/- for completion of a significant
part of the 2nd stage of the project and other construction material cost.
AND/OR
And for this, the CLAIMANT shall as in duty bound, forever humbly pray.
Counsels for the CLAIMANT

15

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1ST NATIONAL ADR TOURNAMENT, 2022 TEAM CODE: LL-16

1ST NATIONAL ADR TOURNAMENT, 2022

IDRC ARBITRATION No.____/2022

IN MATTER CONCERNING THE CONTRACT DATED 27TH APRIL 2019

PRIME CONSTRUCTIONS PVT. LTD. CLAIMANT

ANTYLIA CERAMIC PVT. LTD. RESPONDENT

-MEMORIAL ON BEHALF OF THE CLAIMANT-

Memorial behalf of CLAIMANT

Memorial behalf of CLAIMANT

AIR All India Reporter

ALR Arbitration Law Reporter

Cr. LJ Criminal Law Journal

SCJ Supreme Court Journal

SCR Supreme Court Reporter

UKHL United Kingdom House of Lords

TLR Times Law Reporter

EWHC England and Walse High Court

J&K Jammu & Kashmir

Memorial behalf of CLAIMANT

8. Hari Singh Vs Deewani Vidyawati, AIR 1960 J&K 91

C. BOOKS AND TREATISES

Memorial behalf of CLAIMANT

10. O. P. CHADHA, ALR’S COMPENDIUM OF ARBITRATION AND CONCILIATION ACT,

D. DICTIONARIES AND LAW LEXICONS

Memorial behalf of CLAIMANT

THIS MEMORIAL IN PURSUANCE OF THE MUTUALLY AGREED ARBITRATION CLAUSE OF THE

CONSTRUCTION MATERIAL COST TO THE INDIAN DISPUTE RESOLUTION CENTRE, DELHI TO BE

COMMENCED UNDER ARTICLE 4 OF THE IDRC DOMESTIC ARBITRATION RULES, 2019.

Memorial behalf of CLAIMANT

Memorial behalf of CLAIMANT

Memorial behalf of CLAIMANT

a. What impact is the current scenario having?

a. Amount claimed is not in consonance with the Doctrine of Frustration

Memorial behalf of CLAIMANT

Memorial behalf of CLAIMANT

Memorial behalf of CLAIMANT

What impact is the current scenario having?

(¶9) In Association of Unified Telecom v. UOI & Ors. 5

Memorial behalf of CLAIMANT

Memorial behalf of CLAIMANT

The doctrine of Supervening Impossibility

Amount claimed is not in consonance with the Doctrine of Frustration

Memorial behalf of CLAIMANT

Impossibility of the contract- a ground for invalidation of claims by Respondent

Memorial behalf of CLAIMANT

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