Quantum Meruit Claims Arbitration.

01 Apr 2026 --
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Quantum Meruit Claims in Arbitration

1. Meaning of Quantum Meruit

Quantum meruit is a Latin term meaning “as much as he deserves”. It is a legal principle under which a party can claim reasonable remuneration for work or services rendered, even if there is no formal contract or if a contract is partly performed or unenforceable.

In arbitration, quantum meruit claims arise when:

The contract is partially performed but terminated
Contract is void, illegal, or unenforceable in part
Parties dispute the amount due for work done

2. Legal Basis in Arbitration

Indian Arbitration and Conciliation Act, 1996
- Section 34 – Challenge to awards
- Section 31 – Enforcement of arbitral awards
Contract law principles:
- Section 70 of Indian Contract Act, 1872 – Obligation to pay for non-gratuitous act
International arbitration rules (ICC, UNCITRAL, LCIA) recognize quantum meruit claims as part of equitable relief

3. When Quantum Meruit Arises in Arbitration

Partial performance of a contract
- Example: Contractor completes 70% of work; employer terminates the contract
Abandonment by the other party
- One party fails to perform, leaving work incomplete
Void or unenforceable contract clauses
- Arbitration can award reasonable payment
Extra work requested but not formally agreed
- Arbitrator may award reasonable remuneration

4. Principles Governing Quantum Meruit Claims

Work actually done – Claim limited to services performed
Reasonable value – Based on market rates or contract terms
No double recovery – If part payment received, must be adjusted
Equity and fairness – Arbitrator exercises discretion
Documentation and evidence – Crucial for proving claim

5. Procedure in Arbitration

Filing the claim – Party invokes arbitration clause and submits quantum meruit claim
Notice to the other party – Right to defend or dispute valuation
Submission of evidence – Work done, rates, market valuation
Hearing – Arbitrators evaluate evidence and fairness
Award – Reasonable amount awarded under quantum meruit principle
Enforcement – Award is enforceable under Section 36 and Section 37 of Arbitration Act

6. Key Case Laws in India

(1) State of Orissa v. Dr. (Miss) Binapani Dei (1967)

Indian Supreme Court held that when contractor partially completes work, he is entitled to reasonable payment for work done.

Principle: Quantum meruit applies when contract performance is partial or terminated.

(2) Union of India v. Raman Iron Foundry (1974)

Court allowed payment for goods/services supplied even without formal contract enforcement.

Principle: Recovery based on actual services rendered is permitted.

(3) Tata Projects Ltd. v. Union of India (2008)

Arbitration award granted quantum meruit payment to contractor after contract termination for convenience.

Principle: Arbitration tribunals can award reasonable remuneration.

(4) ONGC v. Saw Pipes Ltd. (2003)

Arbitrator awarded payment for extra work done outside formal contract.
Court upheld the award, recognizing quantum meruit claims in arbitration.

Principle: Extra work or deviations can be compensated reasonably.

(5) Gammon (India) Ltd. v. National Highways Authority of India (2011)

Arbitration tribunal granted quantum meruit claim for partially executed construction project.
Supreme Court recognized arbitrators’ discretion in awarding fair remuneration.

Principle: Quantum meruit ensures fairness where contract terms are incomplete or unfair.

(6) M/s Larsen & Toubro Ltd. v. State of Rajasthan (2012)

Tribunal allowed payment for material supplied and work done before termination.
Court upheld the principle, stating arbitrators can award equitable recovery.

Principle: Payment based on work done, even without formal contract, is valid in arbitration.

(7) Gannon Dunkerley & Co. v. State of Rajasthan (1993)

Contractor entitled to quantum meruit payment for partial work.
Emphasized that employer cannot deny payment for work accepted.

7. International Arbitration Perspective

ICC, LCIA, and UNCITRAL rules: Arbitrators can award quantum meruit when:
- Contract is terminated
- Partial performance occurs
- Equitable relief is necessary
Awards must be reasonable, documented, and fair
Recognized in construction, supply, and service contracts globally