Skip to main content

Arbitral Tribunal Cannot Award Interest If Agreement Expressly Bars Its Payment

In CIVIL APPEAL NO(S). 1539 OF 2019 before the Supreme Court, JAIPRAKASH ASSOCIATES LTD. vs TEHRI HYDRO DEVELOPMENT CORPORATION INDIA LTD., the appellant, a contractor, went for arbitration as per agreement against the Defendant and despite the express prohibition on interest to be paid to the contractor on the money due to him, the majority of the arbitration tribunal awarded interest, relying on SC judgment in Board of Trustees for the Port of Calcutta v. Engineers-De-SpaceAge, which had held that arbitrator's power to award interest as per general principles of law was not stifled by terms of agreement. The Delhi High Court set aside the award to the extent it awarded interest. This led the contractor approaching the SC.

The Supreme Court agreeing with the HC held that the 1996 Arbitration Act had altered the position contained in the 1940 Act.Under the new Act, an arbitrator could not award pendente lite interest when there was an express bar against award of such an interest. This legal position is contained in Section 31(7)(a) of the 1996 Act and the legal position stood crystallised in the case of Sayeed Ahmed and Company v. State of Uttar Pradesh & Ors.


.

Comments

Post a Comment

Most viewed this month

Court approached in the early stages of arbitration will prevail in all other subsequent proceedings

In National Highway Authority of India v. Hindustan Steelworks Construction Limited, the Hon'ble Delhi High Court opined that once the parties have approached a certain court for relief under Act at earlier stages of disputes then it is same court that, parties must return to for all other subsequent proceedings. Language of Section 42 of Act is categorical and brooks no exception. In fact, the language used has the effect of jurisdiction of all courts since it states that once an application has been made in Part I of the Act then ―that Court alone shall have jurisdiction over arbitral proceedings and all subsequent applications arising out of that agreement and arbitral proceedings shall be made in that Court and in no other Court. Court holds that NHAI in present case cannot take advantage of Section 14 of the Limitation Act, 1963 for explaining inordinate delay in filing present petition under Section 34 of this Act in this Court.
Post a Comment
Read more

No Rebate For Stamp Duty Paid In Another State - Bombay HC

A three judge bench of the Hon'ble Bombay High Court (Bombay HC) in a recent judgment in the matter of Chief Controlling Revenue Authority, Maharashtra State, Pune and Superintendent of Stamp (Headquarters), Mumbai v Reliance Industries Limited, Mumbai and Reliance Petroleum Limited, Gujarat1 has held that orders in case of a scheme of arrangement under Section 391 to 394 of the Companies Act, 1956 (Act) involving different High Courts in multiple states, are separate instruments in themselves. Accordingly, stamp duty would be payable on all the orders (and consequently, all the states) without the benefit of remission, rebate or set-off.
Post a Comment
Read more

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more