Corporate Amicus, June 2026

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Article

Contractual claims for profit: Liability, causation and quantification 

By Raghavan Ramabadran, Krithika Jaganathan and Nirupama Shankar

Commercial ventures are centered on a simple premise: the potential for profit. Parties bargain for profit, structure pricing with profit as a metric, and litigate over ‘loss of profits’ when the expected commercial return is impaired. The article in this issue of Corporate Amicus thus examines how contracts can identify and appropriately provision for losses. Observing that the prevented gains qualify as losses sustained, the article discusses types of claims for loss of profit. It elaborately examines, with the help of various court precedents, three different situations based on termination of the contract, potential of the parties and alteration in the scope of the contract, arising while the contract is underway. According to the authors, contracts should consciously record party intent and maintain consistency in treatment across other protective clauses, such as clauses for indemnity and limitation of liability.

Notifications and Circulars

• Foreign Exchange Management (Cross Border Merger) Regulations, 2018 amended
• Companies (Registered Valuers and Valuation) Rules, 2017 amended
• Foreign Portfolio Investment Framework for government securities relaxed
• Timeline for realisation and repatriation of export proceeds reduced
• Forex Swap Facility for select external borrowings introduced
• Temporary CRR and SLR Relief granted for certain FCNR(B) deposits
• Foreign Portfolio Investment Framework for foreign individuals liberalized
• Framework for retention of proceeds and inoperative fund status for AIFs introduced
• Temporary CRR and SLR relief for certain NRE term deposits granted
• Additional Fees for delayed filing of Form DPT-3 relaxed by MCA
• Framework for identification and regulation of Upper Layer NBFCs revised by RBI
• FEMA reporting and compliance requirements rationalized
• Certification requirements for certain personnel associated with investment advice relaxed by SEBI

Ratio decidendi

• Arbitration – Section 21 notice to a company that has ceased to exist is a nullity; arbitral proceedings on basis of such notice are not correct – Telangana High Court
• Non-production of Letter of Guarantee by lender does not vitiate proceedings under IBC Section 95 where personal guarantor has admitted execution of such Letter – NCLAT Chennai
• Mandatory pre-institution mediation under Section 12A of the Commercial Courts Act, 2015 cannot be bypassed on the basis of self-created urgency – Telangana High Court
• Application under Order XLI Rule 27 of the Code of Civil Procedure filed during pendency of appeal is required to be decided along with the final hearing of the appeal and not independently prior to disposal of the main appeal – Telangana High Court
• NCLAT cannot interfere with NCLT’s exclusive power under IBC Section 33(5) to grant a liquidator leave to challenge contract terminations before a Civil Court – NCLAT

News Nuggets

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• CCI approves TVS Group’s acquisition of PGIM India AMC and Temasek’s investment in Romsons Group
• CCI approves Alpha Wave Global's stake acquisition in Nxtra Data
• FSSAI crackdown on energy drink brands; issues notices to 6 firms
• Amazon announces USD 48 Billion investment in India through 2030
• USA’s constitutional privacy protections extend to cellphone location information: SCOTUS