Nagpur: Real estate giant Godrej Properties Limited has suffered a major legal blow after an arbitration tribunal, headed by former Supreme Court judge Justice Indu Malhotra, dismissed the company’s massive counter-claim of ₹1,051.52 crore and instead directed it to pay ₹244 crore in compensation to Goldbricks Infrastructure Pvt. Ltd., along with 12% annual interest.
The verdict comes in connection with the long-disputed Anandam World City project in Nagpur, where both companies have been locked in a legal tussle for years.
Tribunal’s Findings
Between 2011 and 2015, Godrej Properties entered into multiple agreements with Goldbricks for the development, marketing, and infrastructure work of different residential zones and a villa project. However, the tribunal concluded that Godrej had committed “serious breaches” of every agreement, noting:
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- Failure to sell flats despite collecting fees from customers.
- Abandonment of the villa project mid-way.
- Failure to provide even basic infrastructure.
- Complete withdrawal from the Residential Zone-2 project.
The tribunal described these actions as “collective abandonment of responsibilities” and “grave breach of contractual dealings.”
Claims and Counterclaims
- Goldbricks Infrastructure initially demanded damages worth ₹1,366 crore.
- Godrej Properties countered with a claim of ₹1,051.52 crore, which the tribunal dismissed as “grossly exaggerated and unsubstantiated.”
- After evaluating both sides, the tribunal ruled in Goldbricks’ favour, awarding them ₹244 crore plus interest.
Legal Experts’ Reactions
Industry observers believe this ruling sends a strong message to real estate developers.
“The hefty compensation and high interest rate underline that accountability cannot be compromised. This is a clear signal that companies must honour commitments made to partners and customers,” said a senior arbitration lawyer.
Analysts add that while the financial impact may not cripple Godrej Properties, the reputational damage could be significant.
What’s Next for Godrej Properties?
Legal experts suggest the company may seek to challenge the order under Section 34 of the Arbitration and Conciliation Act, 1996. However, the chances of overturning such awards are considered slim. Any delay in payment will also increase the liability due to the 12% annual interest clause.
Wider Impact on Real Estate Industry
The case highlights the growing role of arbitration in resolving disputes within India’s real estate sector. With complex joint ventures and unfinished projects often ending in litigation, this ruling is expected to be seen as a “bellwether case” for developer-partner relations.
For this arbitration, Goldbricks Infrastructure was represented by Advocate Shyam Devani (Devani Associates), while Godrej Properties was represented by Agarwal Law Associates, Delhi.
