A damages claim should connect each alleged breach to an identified loss, supporting records and a legally available measure of compensation. Distinguish actual expenditure, lost revenue, lost profit and avoided costs. Test mitigation, exclusions and double counting before presenting the final figure.
The business situation
A supplier claims the value of cancelled orders as lost profit. The underlying calculation includes revenue that would have required significant production costs, while some capacity was used for replacement work. The breach allegation and the loss calculation need different evidence.
Arbitration strategy begins with the agreement, seat, governing law, institution and parties. Commercially connected events do not necessarily belong in a single proceeding. Jurisdiction, admissibility, merits and recoverable quantum are separate questions that need a coherent evidentiary record.
What needs examining
01. Explain the counterfactual
Set out what would probably have happened without the alleged breach and identify the evidence supporting that account. Separate assumptions from observed facts. Forecasts, historical performance and committed orders may carry different weight. A model should make its assumptions visible rather than burying them in a single spreadsheet total.
02. Reconcile legal entitlement with the financial measure
Review contractual limitations, agreed damages, causation and applicable rules on compensation. Different categories of loss may require different treatment. Explain costs saved, mitigation receipts, insurance or other recoveries where relevant, without assuming their legal effect. The financial expert's calculation should be anchored to the legal case actually pleaded.
03. Preserve an audit trail through the calculation
Every material input should connect to an underlying record or an explained assumption. Keep versions, formulas and the reasons for adjustments. Test for duplicate claims across delay costs, overheads, lost profits and indemnity heads. A transparent calculation can be challenged and refined without losing the connection to the original evidence.
Law, contract and recommended practice
The Arbitration and Conciliation Act, 1996 governs within its scope. The seat and the nature of the arbitration affect the applicable provisions and court jurisdiction. Institutional rules, amendments and current precedent require a matter-specific check.
Connect the control to the evidence
Use this table to scope the review. The legal basis and the practical control are identified separately.
| Obligation or objective | Practical control | Evidence to retain |
|---|---|---|
| Legal assessment Identify a recoverable measure of loss | Breach, causation and remedies analysis | Claim-head legal note |
| Evidentiary control Substantiate the quantum | Source-linked calculation and assumptions | Ledgers, contracts and financial model |
| Recommended practice Avoid overstated recovery | Mitigation and double-count review | Reconciliation and sensitivity analysis |
Records to prepare
Bring the complete, current record to the review. Preserve earlier versions where a change or disputed event makes them relevant.
Common questions
Is lost revenue the same as lost profit?
No. Revenue does not account for costs that would have been incurred or other relevant adjustments. The legally appropriate measure and supporting evidence must be identified.
Does an agreed damages amount remove every evidentiary question?
No. Applicable law and the circumstances still matter, including the contractual trigger and compensation analysis. Do not assume that the stated sum is automatically payable in full.
Prepare a claim-head schedule that a reader can follow from breach to source record to calculation. Identify uncertainty before it is exposed in cross-examination.
Legislation & official resources
These references identify the governing frameworks. Confirm the current text, relevant amendments and applicable judicial position for the matter.
- Arbitration and Conciliation Act, 1996 — official legislative portalIndia Code · Government of India · Read the current Act with the relevant institutional rules and applicable precedent.
This note is general information. The scenario is hypothetical and does not describe a client matter. The legal result depends on the facts, documents, jurisdiction and operative law. No individual lawyer review is represented by the preparation date.
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