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S. RAVINDRA BHAT, DIPANKAR DATTA
Larsen Air Conditioning and Refrigration Company – Appellant
Versus
Union of India – Respondent
Headnote: Read headnote
JUDGMENT :
S. RAVINDRA BHAT, J.
1. Aggrieved by the impugned judgment1 [Judgment dated 17.07.2019 passed by Allahabad High Court in First Appeal from Order No. 1227/2003] of the Allahabad High Court, the appellant has approached this court with a simple question of law, as to whether the High Court erred in modifying the arbitral award to the extent of reducing the interest, from compound interest of 18% to 9% simple interest per annum.
Facts
2. The dispute between the appellant and Union of India (hereafter ‘respondent-state’) arose from a contract entered into pursuant to being awarded the tender. In the course of work, certain disputes arose. On 22.04.1997, the respondent-state referred the dispute to arbitration, and the proceedings closed on 24.10.1998. The tribunal published its award on 21.01.1999 and directing the first four respondents to pay 18% pendente lite and future compound interest on the award in respect of Claim Nos. 1-8.
Setting aside arbitral award – Illegality must go to root of matter and cannot be of a trivial nature.
The court does not have the power to modify an award under Section 34 of the Arbitration and Conciliation Act, 1996.
The main legal point established in the judgment is the determination of the applicable rate of interest on the awarded amount in an arbitration proceeding, considering the pre-amendment and post-ame....
The Arbitral Tribunal's authority to award interest is governed by the arbitration agreement, with specific provisions for pre-award and post-award interest under the Arbitration Act.
The court emphasized the limited scope of interference under Section 34 of the A & C Act, 1996 and the principle that the court should not substitute its reasoning for that of the Arbitrators, especi....
The main legal point established in the judgment is the interpretation of the applicability of amended provisions of the Arbitration and Conciliation Act, 1996, particularly section 31(7)(b) and sect....
Section 31(7)(a) of Act deals with grant of pre-award interest.
(1) Interest has to be awarded as specified in contract and in absence of any contract, as per discretion of Arbitral Tribunal - Arbitral Tribunal can grant pre-reference interest from date on which ....
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