Judgments and Awards

Shankar Construction Company Vs national Building Construction Corporation Ltd

A time period of 2 months was given to the respondent for making payment of interest . in case of non payment within time, the claimant was to be entitled to enhanced rate of interest from 1.6.2001 to the date of payment or the date of decree, whichever is earlier. The respondent submitted that the date of decree being 31.3.2001 which was earlier to 1.6.2001 entitlement of interest is confined up to date of the award and the 2 month period for payment of interest was to commence from 1.6.2001.

It was held that the date of award was not to be treated as the date of decree for the purpose of avoiding payment of future interest, especially when there is a specific provision made for payment of interest from the stipulated date to date of payment. Section 37 only provides for 'enforcement of the award as if it were a decree'; it creates a legal fiction.

Skanska Cementation India Ltd Vs Bajranglal Agarwal

There was a contention that the principal amounts were accepted without claiming the delayed interest and thus interest could not have been awarded. It was deemed waived.

It was held that the mere fact that various amounts were accepted without reserving the right to claim interest for delayed period was not to be deemed a waiver of such a right, in the absence of any express communication between the parties. Also no documentary evidence was produced before the Tribunal to show that by accepting the principal amount, the party had waived its right to interest.

Union of India Vs P Jeevanandam

The High Court, while appointing the arbitrator, fixed the initial remuneration at Rs. 30, 000. Subsequently, the arbitrator with the consent of both parties fixed his fees at Rs 2 Lakhs, to be shared by both parties equally. On challenge, it was held that no power is given to the Chief Justice to fix the fees of the arbitrator appointed by him, but only specifies the factors to which they should have due regard for securing the appointment of a qualified, independent and impartial arbitrator.

It was further held that Section 31(8) clearly empowers the arbitrator to fix his fees with the consent of both the parties. The intention of the Legislature appears to be that independent arbitrators may not like to act as arbitrators, if they are not empowered to fix their own fees. If the words 'other considerations' are to be construed as giving power to the Chief Justice or his designate to fix the fees of the arbitrator, then the very intention of the Legislature will be defeated. It is one of the cardinal principles of statutory interpretation that an interpretation, which has the effect of destroying the plain intention of the Legislature, has to be avoided, if possible.

Kifayatullah Haji Gulam Rasool Vs Bilkish Ismail Mehsania

According to the facts of the case, an order by way of interim measure had been passed by this court on 23.2.1998, which was made operative pending hearing and final disposal of the arbitral proceedings. The issue that arose was whether the arbitral proceedings had come to an end or not.

It was held that arbitration proceedings shall automatically stand terminated only after making of final award, which decides or completes decision of claims which are presented. Section 32 unequivocally provides that only 'final award' shall terminate the arbitral proceedings. Arbitral proceedings can also be terminated by an order of the Tribunal, which order can only be passed when the claimant withdraws the claim or when the parties agree on the termination of the proceedings or when the Tribunal finds that continuation of proceedings has become unnecessary or impossible. The Act makes specific provision for commencement and termination of arbitral proceedings.

However, in the instant case, none of the events contemplated u/s 32 have taken place. No final award has been passed. No joint request depicting agreement of parties have been made to the Tribunal to terminate proceedings. No orders have been passed by the Tribunal as u/s 32(2). Therefore, it cannot be said that the proceedings have come to an end.

Maharashtra State Electricity Board Vs Datar Switchgear Ltd

It was the claimant's contention that power u/s 32(2)(c) can be used as a substitute for enforcement of the award or as in the present case, enforcement of an interim order is perceived by one of the parties as being likely to encounter difficulties because of an independent provision of law ie. SICA 1985.

While disagreeing with the claimant's contention, it was held that SICA was enacted to protect properties of a Sick Industrial Company against execution without permission of BIFR. This does not render arbitral proceedings impossible or unnecessary.

Section 32(2) contemplates 3 situations where the arbitral tribunal is vested with power to terminate proceedings, viz. (i) when the claimant withdraws his claim (ii) when the parties agree to terminate proceedings (iii) when the tribunal finds that continuation of the proceedings has become unnecessary or impossible. The tribunal has been vested with a residuary power to terminate proceedings where it finds that a continuation thereof has become unnecessary or impossible for any reason.

The term 'unnecessary' may involve a situation where the proceedings are rendered in fructuous. A situation may also arise where adjudication of the dispute becomes unnecessary either because the dispute has not survived or for any other reason. 'Impossibility' is not merely to be viewed as physical impossibility of adjudication, but may encompass a situation where a party by a consistent course of conduct renders the very continuation of the proceedings impossible.

Union of India Vs Nav Bharat Nirman Company

This decision clarified the scope of power of the arbitrator to make an additional award. It was held that as per section 33(4), a party may request within 30 days from the receipt of the arbitral award to make an additional award as to the claims presented in the arbitral proceedings but omitted from the arbitral award. Thus, the arbitrator is empowered to make an additional award in respect of any item of claim on which the arbitrator has omitted to consider and give an award in the original award. Where no specific amount was awarded by the arbitrator against some original claims, the arbitrator can award additional award and such additional award is not liable to be set aside.

Union of India Vs Punjab Communications Ltd

An award had been passed by the tribunal, however, it was silent in respect of what amount has been awarded and which one of such amount has been denied partly or as a whole. The question that arose was whether it was liable to be set aside.

It was held that an award to be valid must satisfy 2 conditions vis. (i) it must be certain and (ii) it must contain the decision. The award must be clear as to the nature and extent of duties it imposes on the parties and the award must be complete without leaving matters to be dealt with subsequently. It must be clear and unambiguous and final in relation to the issues and claims with which it deals.

In the present case, the award did not specify the amount which is payable by the objector to the respondent and the claim for the amount which has been denied by it is incomplete, ambiguous and incapable of being implemented or enforced, therefore is liable to be set aside.

Jindal Drugs Limited Vs Noy Vallesina Engineering Spa

The agreement between the parties clearly laid down that the place of arbitration would be London and that the governing law (substantive law governing the contract) would be laws of India. The award was made in London and the question that arose was whether such an award can be challenged by filing an application u/s34. The petitioner contended that since the proper law of the contract is the substantive law in force in India, therefore he is entitled to challenge the validity of the award u/s 34, else the petitioner is left remedy-less.

While answering in the negative, it was held that an application can be made u/s 34 for setting aside only domestic awards in accordance with provisions of Part I. It was further observed that the need to file an award in court arises only if it is required to be enforced and the need to challenge the award arises only if the party takes steps to enforce the award. In this case, in case the Respondent decides to enforce the award in India, it will have to make an application u/s 48 and in that event, the petitioner can appear before the court and request that the court refuse to enforce the award against it.

Deepak Mitra Vs District Judge, Allahbad

The scope of objections to the award was discussed in this case. It was held that the arbitral tribunal has been given a free hand to deal with the disputes between the parties and to arrive at its resolution. A finality has been attached to an arbitral award u/s 35 and the law has turned a full circle as an award by itself has become enforceable as a decree of the court.

The award is not open to challenge on the ground that the arbitrator has reached a wrong conclusion or has failed to appreciate the facts. On the other hand, u/s 34 or u/s 9, if the court is called upon to decide the objection raised by a party against an award or to make interim measure of protection, the jurisdiction of the court is limited to what is expressly provided in the said provisions. It has no jurisdiction to sit in appeal and examine the correctness of the award on merits with reference to the materials produced before the tribunal or to issue an order of injunction, which may result in obstructing the proceedings before the tribunal.