{"id":400254,"date":"2026-11-02T11:00:54","date_gmt":"2026-11-02T05:30:54","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=400254"},"modified":"2026-11-02T10:57:44","modified_gmt":"2026-11-02T05:27:44","slug":"icc-india-arbitration-conference-2026-proving-quantifying-damages-in-arbitration","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2026\/11\/02\/icc-india-arbitration-conference-2026-proving-quantifying-damages-in-arbitration\/","title":{"rendered":"ICC India Arbitration Conference 2026: Experts examine the challenges of proving and quantifying damages in arbitration"},"content":{"rendered":"
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The ICC India Arbitration Conference 2026<\/a>, held on 31 October 2026 at the Trident Hotel, Nariman Point, Mumbai, brought together members of the arbitration community to discuss contemporary developments and challenges in international arbitration. The conference featured discussions on monetary remedies, asset recovery in the digital era and ethical standards in international arbitration.<\/p>\n

As part of the conference proceedings, Session I, titled “Let’s Talk About Numbers!: A Fireside Chat on Monetary Remedies in Arbitration”<\/span>, examined the practical challenges involved in establishing and quantifying monetary claims in arbitration. Moderated by Ms.<\/span> Smitha Menon<\/span>, Partner, WongPartnership, the discussion featured Dr. Justice (Retd.) Ferdino Rebello<\/span>, Former Chief Justice of the High Court of Allahabad, Ms. Ishani Vora<\/span>, Principal, Osborne Partners and Mr. Pratik Pawar<\/span>, Partner, JSA Advocates and Solicitors.<\/p>\n

Why quantum must be considered at the outset of arbitration<\/p>\n

Opening the discussion, Ms. Smitha Menon<\/span> observed that lawyers often concentrate on establishing liability while treating quantum and damages as matters to be addressed at a later stage, frequently leaving the exercise to experts. She questioned this approach and emphasised that the assessment of monetary relief should form part of the case strategy from the beginning.<\/p>\n

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[In picture: Ms. Smitha Menon]<\/p>\n

Responding to Ms. Menon’s question on the most consequential mistake counsel make while preparing monetary claims, Mr. Pratik Pawar<\/span> observed that quantum is frequently treated as a downstream exercise, with damages being considered only after the liability case has been developed. He explained that this approach often results in claims being framed around the client’s version of events without sufficient attention to the evidence required to establish the claimed loss. When experts are brought into the proceedings only after the pleadings have been finalised, they are expected to fill gaps in the damages case within an already established legal framework.<\/p>\n

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[In picture: Mr. Pratik Pawar]<\/p>\n

Mr. Pawar emphasised that counsel should work with experts at the initial stage itself and develop a clear theory of damages. This would help ensure that the factual case, documentary evidence and legal basis of the claim are aligned. He also cautioned that failing to consider causation and remoteness at the outset could weaken the claim. He further identified the practice of inflating headline claims without adequate documentary support as another significant mistake. According to him, advancing numerous aspirational claims may undermine the credibility of otherwise well-supported claims before the arbitral tribunal. Emphasising the importance of credibility, Mr. Pawar stated:<\/p>\n

“Your credibility in front of the arbitral tribunal increases if you give up those claims, if you know those claims are bogus or without any documentary evidence, give them up.”<\/p>\n

He suggested that counsel should prioritise a smaller number of claims supported by reliable documentary evidence rather than pursue several claims that cannot ultimately be established. On the relationship between credible claims and settlement strategy, Mr. Pawar observed that parties need not inflate their claims to retain negotiating leverage. Instead, they should identify their stronger claims and use those claims as a basis for meaningful settlement discussions.<\/p>\n

Role of experts and the importance of timely instructions<\/p>\n

Ms. Ishani Vora<\/span> observed that experts are often approached after the legal case has already been framed, leaving them with limited flexibility to develop or examine the damages theory. She explained that late instructions may result in claims being advanced without contemporaneous documentary support or a sufficiently developed legal basis. It may also mean that potentially recoverable claims are overlooked because the expert is not involved when the relevant facts and documents are first examined.<\/p>\n

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[In picture: Ms. Ishani Vora]<\/p>\n

She highlighted the importance of separating the client’s commercial grievances from the factual and documentary material necessary to establish loss. According to her, the expert’s task involves examining the available information, identifying the relevant facts and connecting the damages analysis with the legal case and supporting evidence. Ms. Vora observed:<\/p>\n

“…valuation is an art and a science.”<\/p>\n

She explained that two experts may approach the same dispute differently from a technical perspective. However, their conclusions should remain capable of being supported by evidence and financial valuation principles. The assumptions, instructions and documents provided to the experts may explain differences between their respective assessments. The discussion also highlighted the importance of understanding the legal and factual assumptions underlying an expert’s analysis. Ms Vora suggested that the differences between opposing experts should be examined in light of the instructions and material made available to them, rather than being treated merely as disagreements over methodology.<\/p>\n

Contractual damages, Sections 73 and 74 and the burden of proving loss<\/p>\n

Addressing the tribunal’s perspective, Dr. Justice (Retd.) Ferdino Rebello<\/span> referred to the principles governing damages under Sections 73 and 74, Contract Act, 1872 (Contract Act), and the importance of preparing claims in accordance with the applicable legal framework. He observed that parties frequently assume that a claim for liquidated damages will necessarily succeed once a breach or delay is established. However, the analysis may also require consideration of whether the claimant itself committed a breach and whether the contractual and factual circumstances support the claim.<\/p>\n

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[In picture: Dr. Justice (Retd.) Ferdino Rebello]<\/p>\n

Referring to construction disputes, Justice Rebello explained that where both parties have committed breaches, a claim for liquidated damages may not be sustainable in the manner originally presented. In such circumstances, parties may need to establish their entitlement to damages under Section 73, Contract Act. He cautioned that counsel often fail to prepare an alternative case for damages under Section 73, Contract Act when their claim for liquidated damages cannot be sustained. Justice Rebello also discussed disputes involving goods that do not conform to contractual specifications but are nevertheless accepted and used by the purchaser. In such cases, the question is not necessarily whether a breach has occurred, but how the resulting loss should be measured. Emphasising that damages cannot be treated as an automatic monetary benefit arising from a breach, he stated:<\/p>\n

“Damages is not a windfall. Damages is something that you must prove.”<\/p>\n

He further observed that parties and counsel must address the method of quantification and the evidence required to establish the actual loss suffered.<\/p>\n

Honest guesswork and the distinction between proof of loss and quantification<\/p>\n

The panellists also examined the principle of honest guesswork and the circumstances in which a tribunal may estimate damages where precise quantification is difficult. Mr. Pawar explained that a claim for legally recoverable loss should be examined through three considerations: whether the loss is recoverable under the contract, whether the necessary causal connection between the breach and the loss can be established, and whether the claimant possesses or can obtain the documents and evidence required to prove the loss.<\/p>\n

He cautioned that a commercial grievance, such as a failed business transaction or an unsuccessful project, does not automatically constitute legally recoverable loss. The claimant must establish the connection between the alleged breach and the loss suffered.<\/p>\n

Explaining the limits of the honest guesswork principle, Mr. Pawar observed that a tribunal may use it to estimate the amount of compensation where the claimant has made a genuine attempt to establish the loss but has been unable to quantify it precisely. However, the principle cannot be used to compensate for a failure to prove that loss was actually suffered. He stated:<\/p>\n

“…the honest guesswork may help you fill in the gaps as far as your quantification is concerned. It’s not going to fill in the gaps for proof of loss.”<\/p>\n

Justice Rebello further explained that Sections 73 and 74, Contract Act must be understood in their respective contexts. Where damages can be proved, the claimant must establish them through evidence. In certain cases involving liquidated damages, where precise proof may not be possible, the contractual stipulation and applicable legal principles may assist in determining compensation. He cautioned against treating guesswork as a general substitute for proof in every claim under Section 73, Contract Act.<\/p>\n

Loss of chance, loss of opportunity and the importance of causation<\/p>\n

The discussion further examined the distinction between loss of chance and loss of opportunity, particularly where a claimant seeks compensation for business or projects that did not materialise. Ms. Vora explained that a claim for loss of chance may concern the direct loss of an opportunity arising from a particular contract or project. A claim for loss of opportunity may extend further, alleging that the failure of one project affected the claimant’s ability to secure other projects or pursue wider business opportunities. She emphasised that such claims require more than an assertion that the claimant could have obtained additional work. The claimant must identify the opportunities, establish that it was realistically positioned to pursue them and support the claim with relevant evidence.<\/p>\n

Referring to an example involving a contractor who claimed that termination of an initial project had deprived it of the opportunity to undertake several other projects, Ms. Vora explained that the absence of an established track record, sufficient capacity and supporting evidence could undermine the claim. She noted that the claim was eventually dropped after the evidentiary deficiencies became apparent, observing that such issues could have been identified much earlier.<\/p>\n

She also referred to the decision in Tata Power Co. Ltd.<\/span> v. Kleros Capital Partners Ltd<\/span>., 2026 SCC OnLine SICC 1<\/a>, a decision of the Singapore International Commercial Court dated 26-08-2026, which she cited as an example of a case in which loss-of-opportunity claims were upheld and the tribunal examined the probability of the future opportunity being realised.<\/p>\n

Also Read: Tata Power v. Kleros: No Mine, No Profits, Still a US $490 Million SIAC Award<\/a><\/p>\n

Ms. Vora further distinguished between legal causation and what she described as quantum causation. She explained that even where a breach has occurred and a factual connection can be established, the claimant must still demonstrate that the breach resulted in the financial loss being claimed. Illustrating this distinction through an example involving an events venue, she explained that although events had not been held as contemplated under the arrangement, the available evidence suggested that the venue might not have generated the expected revenue in any event. The evidence included feedback concerning the venue’s location, services and lack of parking facilities. The example demonstrated that establishing a breach and identifying a potential loss of revenue may not be sufficient unless the claimant can also establish that the breach actually caused the financial loss.<\/p>\n

Expert evidence, delay analysis and the use of the Hudson formula<\/p>\n

Justice Rebello expressed concern that expert evidence is not sufficiently used in several domestic arbitrations in India, particularly in disputes involving construction contracts, delay and quantification of damages1<\/sup><\/a>. He observed that parties frequently claim compensation for delay, idling of machinery, manpower and overheads without providing a sufficiently developed method of quantification. Referring to the use of the Hudson formula2<\/sup><\/a>, he cautioned that reliance on a recognised formula does not automatically establish entitlement to damages3<\/sup><\/a>.<\/p>\n

He explained that a claimant seeking compensation for idling machinery4<\/sup><\/a> must establish the relevant circumstances, including whether the machinery was hired, whether it could have been surrendered or whether it could have been deployed elsewhere. Similarly, a claim for idling manpower must be supported by evidence demonstrating that the workforce was actually retained and that the claimed expenditure was incurred. Justice Rebello emphasised that tribunals require adequate assistance from counsel and experts to determine whether the claimed losses were actually suffered and whether the proposed method of calculation is justified. He observed that the absence of such evidence may leave a tribunal with little choice but to reject a claim, even where it appears that some loss may have been suffered5<\/sup><\/a>.<\/p>\n

What makes a reliable damages model?<\/p>\n

The panellists next examined the technical aspects of preparing and assessing damages models, including the quality of underlying data, assumptions, methodology and the treatment of missing information.<\/p>\n

Responding to Ms. Menon’s question on the distinction between a reliable damages model and a complicated spreadsheet, Ms. Vora explained that a model must be capable of assisting the tribunal in understanding the claim and evaluating the effect of different assumptions. She observed that some models may necessarily be complex because they reflect the nature of the underlying business or dispute. However, a model should not become a black box in which numerous assumptions and calculations obscure the actual claim. She stated that a good model should allow the tribunal to understand the calculations, make adjustments to particular inputs and assess the consequences of accepting or rejecting specific assumptions.<\/p>\n

Ms. Vora also emphasised that the model must reflect the alleged breach and the legal framework adopted by the claimant. It should isolate the financial difference between the position in which the breach occurred and the position that would have existed had the breach not occurred, while accounting for other relevant factors.<\/p>\n

Addressing gaps in the available data, she explained that experts may examine historical performance, invoices, payment records, market information and comparable business activity. Where reliable data remains unavailable, sensitivity analysis may help demonstrate the possible effect of different assumptions. However, she stressed that transparency is essential. An expert should explain how each gap has been addressed and identify where the available information may affect the reliability of the model.<\/p>\n

Cross-examination of quantum experts and testing material assumptions<\/p>\n

Mr. Pawar suggested that counsel should work backwards from the final figure presented by the opposing expert and identify the assumptions that have the greatest impact on the result. Rather than becoming involved in lengthy technical disagreements over methodology, counsel should focus on two or three material assumptions that determine the outcome of the model. He emphasised that cross-examination should examine whether those assumptions are supported by documents, the expert’s independent assessment or merely by representations made by the client. Mr. Pawar explained how questioning helped establish that the opposing expert lacked experience in the relevant industry and that several opinions expressed in the expert evidence were based primarily on client instructions. He observed that the selection of an expert with appropriate domain knowledge is therefore important, as the expert’s credibility and conclusions may be tested during cross-examination.<\/p>\n

Discovery and interrogatories as tools in monetary claims<\/p>\n

Towards the conclusion of the discussion, Justice Rebello highlighted the limited use of discovery and interrogatories in domestic arbitrations in India. He observed that these procedural tools could assist parties in obtaining relevant material before cross-examining witnesses and testing the basis of monetary claims. In his view, greater use of discovery and interrogatories could help expose unsupported claims and identify weaknesses in the opposing party’s case at an earlier stage. Emphasising their practical value, Justice Rebello urged counsel to pay greater attention to these procedures, stating:<\/p>\n

“…concentrate on these two parts. These are the two most important parts, discovery and interrogatories for you to pursue your matter.”<\/p>\n

Ms. Menon endorsed this as an important takeaway from the discussion, observing that the session had highlighted the need to approach monetary claims with greater attention to evidence, preparation and the underlying assumptions.<\/p>\n

Assessing compensation following termination of a contract<\/p>\n

During the audience interaction, a participant raised a question concerning a software supplier whose contract involved installing software on 100 ships over a period of three years. The supplier had installed the software on only six ships and had received a 10 per cent advance payment before the ship owner issued a termination notice alleging that the software was not fully functional within the stipulated period.<\/p>\n

The question concerned whether the supplier could claim compensation for the entire 100-ship contract when it had incurred development costs but had not produced evidence that it had turned down other projects or made commitments to subcontractors in anticipation of performing the remaining work.<\/p>\n

Responding to the question, Justice Rebello explained that the analysis would depend significantly on whether the termination was legally justified. If the termination were found to be illegal, the tribunal would have to examine the consequences of the termination and the loss suffered by the supplier. He observed that the supplier had entered into a contract for the entire scope of work and had priced its performance on that basis. The assessment of compensation would therefore require consideration of the contractual arrangement and the evidence placed before the tribunal. The exchange illustrated the broader theme of the session: the existence of a contractual breach does not, by itself, determine the amount of compensation. The claimant must establish its entitlement and support the assessment of loss with appropriate evidence.<\/p>\n

Closing remarks<\/p>\n

The session concluded with a broader reminder that success in pursuing monetary remedies in arbitration depends not merely on establishing a breach of contract, but on demonstrating the loss flowing from it through credible evidence and a defensible method of quantification. The panellists emphasised the need for counsel to engage experts at an early stage, develop a coherent damages strategy, address causation and identify evidentiary gaps before advancing monetary claims. The discussion also highlighted the importance of effective cross-examination, discovery and interrogatories in testing the reliability of damages assessments. Ultimately, the session reinforced that a well-founded monetary claim must be built on the combined strength of legal entitlement, factual proof and sound financial analysis.<\/p>\n

SCC Times is the Information & Documentation Partner for the ICC India Arbitration Conference 2026. Read more about ICC India Arbitration Conference 2026:<\/p>\n