The Madras High Court has halted certain works related to a project of Foxconn’s Tamil Nadu unit Yuzhan Technology India, amid a pending contract dispute with BNR Infrastructure Projects [BNR Infrastructure v. Yuzhan Technology]
BNR and Yuzhan had entered into an agreement on October 29, 2025 after which a letter of award was issued by Yuzhan in favour of BNR. However, due to disputes over delays in execution of the works, Yuzhan on May 30 issued a notice partially terminating the contract.
The matter is currently pending before an arbitrator. In the meantime, BNR moved the High Court under the Arbitration and Conciliation Act, 1996 seeking an interim injunction restraining Yuzhan from invoking bank guarantees aggregating to ₹310 crore. It also sought a stay on the May 30 partial termination notice.
Justice K Kumaresh Babu found that Clause 18.1.3 of the contract gave BNR 30 days from the termination notice to complete its post-termination obligations. These include ceasing terminated works, handing over completed permanent works and project materials, submitting project documents and assisting in transition.
The Court found that since the termination notice was issued on May 30, the 30-day period would expire only on June 29.
It thus held that Yuzhan’s right to continue the works under Clause 18.1.7 would arise only after the expiry of this 30-day period and after compliance with the contractual mechanism.
"In view of the same, this Court is of the view that the respondent cannot claim to continue to do work either by itself or by any third parties till 29.06.2026," the Court said.
BNR earlier argued that after issuing the termination notice, Yuzhan could not continue the project works through other contractors or use materials and equipment belonging to BNR at the site.
Senior Advocate PS Raman, appearing for BNR, argued that there were delays on the part of Yuzhan in handing over the site and finalising designs.
BNR further argued that under the contract, it was entitled to extension of time for delays attributable to Yuzhan. It also contended that proper corrective notices had not been issued before termination.
In response, Yuzhan argued that BNR had failed to complete the works within the agreed timeline. It was submitted that BNR’s delays affected benefits promised to Yuzhan by statutory authorities for timely establishment of the industry.
Yuzhan also argued that after termination, it was entitled under the contract to complete the balance works by itself or through third parties. It claimed a right to retain and use BNR’s equipment and materials at the site.
The Court refused to go into the merits since a sole arbitrator has already been appointed with the consent of the parties. It examined the limited question of whether Yuzhan could continue the works immediately after issuing the termination notice.
Finding that the 30-day period for post-termination obligations was not over yet, the Court held that Yuzhan cannot continue the works either by itself or through third parties till June 29.
“Till the time expires under Clause 18.1.3, the respondent cannot be heard to say that under Clause 18.1.7, the respondent is entitled to continue the work,” the Court said.
BNR was represented by Senior Advocate PS Raman, with Advocates Anirudh Krishnan and Adarsh Subramanian.
Yuzhan was represented by Senior Advocate Sathish Parasaran with Advocate S Manuraj.
EKK Infrastructure Limited, the applicant in the impleadment application, was represented by Senior Advocate Srinath Sridevan with Advocate Arvind Srevatsa.
A third party was represented by Senior Advocate SR Rajagopal, with Advocate Akshay Pradeep.
[Read Judgment]