Specific Performance After Contract Termination Permissible If Revived By Conduct, Even In Arbitration: Bombay High Court

Justice Sandeep V. Marne made the observation while hearing a petition filed by Lotus Logistics and Developers Pvt. Ltd, challenging an arbitral award passed in favour of Evertop Apartments Co-operative Housing Society Ltd. It observed:

“In my view therefore, the principle of impermissibility to seek specific performance of terminated contract is subject to exception of intervening event of revival of contract. The principle would apply only to a case where the contract is treated as at end by Plaintiff as on the date of filing of the suit. In a case where the contract is terminated, but subsequently parties act in performance of contract, Plaintiff would not be debarred forever from seeking specific performance merely because at one point of time, he elected to put an end to the contract.”

The dispute arose between Lotus Logistics and Evertop Apartments from a redevelopment agreement executed on May 3, 2008 for redevelopment of the society's property in Mumbai. Under the agreement, the developer was obligated to complete construction and secure an occupation certificate in accordance with the sanctioned plan dated September 17, 2008. Alleging delay in completion, deviations from approved plans, and stoppage of monthly compensation from January 2014, the society terminated the development agreement and other documents by issuing a termination notice in October 2015.

Thereafter, arbitration proceedings were initiated and the developer made statements before the court expressing willingness to take steps to obtain the occupation certificate. Relying on this post-termination conduct and representations, the arbitral tribunal granted performance-linked directions, which were subsequently challenged before the court in proceedings under Section 34 of the Arbitration Act.

Relying on these post-termination representations and subsequent conduct, the arbitral tribunal directed the developer to amend plans, obtain the occupation certificate for the society's building, and granted alternative monetary reliefs in the event of failure. The developer challenged the award contending that once the contract stood terminated, specific performance could not be granted in law.

The court clarified that the bar against seeking specific performance of a terminated contract applies only where the plaintiff treats the contract as finally ended as on the date of filing proceedings. It said that where despite termination, parties subsequently act in performance of the contract or make representations amounting to revival, the plaintiff is not permanently precluded from seeking specific performance.

Upholding the award, the court held that the arbitral tribunal was justified in granting performance-linked relief after examining post-termination conduct indicating revival of contractual obligations.

Case Title: Lotus Logistics and Developers Pvt Ltd v. Evertop Apartments Co-operative Housing Society Ltd

Case Citation: 2026 LLBiz HC (BOM) 27

Case Number: Commercial Arbitration Petition (L) No. 34791 of 2024

For Petitioner: Senior Advocates Janak Dwarkadas, Prateek Seksaria with Advocates Ankit Lohia, Dharam Jumani, Arun Panickar, Rohit Agarwal, Vijay Nair, Mihir Nerurkar

For Respondent: Senior Advocate Ravi Kadam with Advocates Piyush Raheja, Vikramjit Garewal, Aadil Parsurampuria, Tejas Agarwal, Ria Goradia, Tejaswi Pania, Ishaan Choudhary i/b. M/s. IC Legal