Madras High Court Suspends Foxconn Project Work Amid BNR Dispute
The Madras High Court has issued a suspension on certain construction works pertaining to Foxconn’s Tamil Nadu subsidiary, Yuzhan Technology India, due to an ongoing contractual disagreement with BNR Infrastructure Projects. This legal matter, formally recognized as BNR Infrastructure v. Yuzhan Technology, involves a contract signed on October 29, 2025, followed by a letter of award given by Yuzhan to BNR. However, disagreements emerged over project execution delays, leading Yuzhan to issue a partial contract termination notice on May 30.
The case is currently under arbitration, but BNR has approached the High Court under the provisions of the Arbitration and Conciliation Act, 1996. BNR seeks an interim injunction to prevent Yuzhan from utilizing bank guarantees amounting to ₹310 crore and requests a stay on the partial termination notice dated May 30.
Justice K Kumaresh Babu evaluated the contract’s Clause 18.1.3, which allows BNR a 30-day period post-termination notice to fulfill its responsibilities. These responsibilities include halting terminated works, handing over completed projects and materials, submitting relevant documents, and assisting in transition. Given that the termination notice was issued on May 30, this 30-day window extends until June 29.
Consequently, the Court determined that Yuzhan’s right to resume works under Clause 18.1.7 would only be applicable post the conclusion of this 30-day period, contingent upon adherence to the agreed contractual process. In its ruling, the Court explicitly stated, “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.”
BNR, represented by Senior Advocate PS Raman, argued that post-termination, Yuzhan should not be allowed to continue project operations through other contractors or utilize BNR’s materials and equipment at the site. BNR contended that delays attributable to Yuzhan, such as site handover and design finalization, warranted an extension of the project timeline, as per the contract’s provisions. Moreover, BNR argued that proper corrective notices were not issued prior to termination.
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In defense, Yuzhan contended that BNR did not complete the works within the stipulated timeline, affecting Yuzhan’s benefits from statutory authorities for timely project completion. Yuzhan asserted its right, as per the contract, to finish the remaining works independently or through third parties, and to retain and utilize BNR’s equipment and materials at the site.
The Court refrained from delving into the merits, as a sole arbitrator has been appointed with both parties’ consent. Instead, the Court focused on whether Yuzhan could continue the works immediately following the termination notice. Establishing that the 30-day post-termination obligations period was still active, the Court ruled that Yuzhan cannot proceed with the works, either independently or through third-party contractors, until June 29.
BNR was represented by Senior Advocate PS Raman, along with Advocates Anirudh Krishnan and Adarsh Subramanian. Yuzhan’s legal team included Senior Advocate Sathish Parasaran and Advocate S Manuraj. EKK Infrastructure Limited, an intervener in the case, was represented by Senior Advocate Srinath Sridevan and Advocate Arvind Srevatsa. A third party in the case was represented by Senior Advocate SR Rajagopal and Advocate Akshay Pradeep.
