IMPORTANT POINT
The court established that in the absence of explicit terms in an arbitral award regarding interest, the default is simple interest, and claims for compound interest must be clearly stated in the award to be enforceable.

JUDGMENT/ORDER

1. There are two Petitions before us. Writ Petition No. 5801 of 2023 is by Centrient Pharmaceuticals India Pvt Ltd ("CPIPL"). The Respondent is Hindustan Antibiotics Ltd ("HAL"), the Petitioner in Writ Petition (L) No. 11851 of 2023.

2. It all began in 1995 when the two parties entered into a Joint Venture Agreement ("JVA") of 6th September of that year. They agreed to form a Joint Venture company to manufacture and market Penicillin-G. There were also certain ancillary agreements.

3. Some 20 years, the parties found themselves at loggerheads and their disputes were taken to arbitration resulting in an award dtd. 26/6/2015, by which an amount of Rs.127.50 crores was made payable by CPIPL to HAL. The contentious portion for our purposes today is the award of interest. There is no dispute that the award said that interest would run at 12% per annum from the date of the claim until payment. The award did not use the words 'simple interest'. This is the reason for much of the controversy that followed.

4. In September 2015, both parties filed applications before the Pune District Court under Sec. 34 of the Arbitration and Conciliation Act 1996 ("Arbitration Act") challenging the award. The Arbitration Act was amended in 2015. But the arbitration petitions had been filed prior to the amendment. Parties proceeded on the footing that the amendment would not apply. Applications were made under Sec. 9 by HAL for security of the amount awarded. At this stage, HAL made no claim for compound interest. Its computation was entirely on the basis of simple interest. Later in 2015, HAL filed a Sec. 9 application asking for a deposit of Rs.337.526 crores, again computing interest at 12% per annum simple interest.

5. On 29/9/2017, the Pune District Court noted the application that HAL had made but rejected it apparently on the ground that HAL had already instituted an Execution Application before the Pune District Court; hence, it held, the Sec. 9 Application was not maintainable. HAL filed an Arbitration Appeal under Sec. 37 before this Court. By an order of 19/6/2019 this Court remanded the Sec. 9 Application to the Pune District Court for reconsideration afresh. By then HAL had withdrawn its Execution Application. On 1/7/2019, the Pune District Court allowed HAL's Sec. 9 Application and directed CPIPL to deposit 50% of the amount awarded.

6. On 12/7/2019, both sides filed Arbitration Appeals against the order of 1/7/2019. In its Arbitration Appeal, HAL said that the amount then due with interest came to Rs.376.186 crores, again a computation based on a reckoning of simple interest at 12% per annum. On 31/7/2019, this Court disposed of both Arbitration Appeals. It held that the Sec. 9 Application was not maintainable as the award had become enforceable and executable as a decree of the Court. This Court set aside the Pune District Court's order of 1/7/2019 but noted CPIPL's statement that it would furnish a bank guarantee for the principal amount. The direction to CPIPL was to furnish a bank guarantee of a nationalised bank for Rs.150.00 crores and the order said that the furnishing of bank guarantee would be subject to HAL not executing the award.

7. CPIPL furnished a bank guarantee of Rs.150.00 crores.

8. HAL filed a Special Leave Petition ("SLP") before the Supreme Court challenging this Court's order of 31/7/2019. In this SLP, HAL had a computation sheet. This continued to show interest being computed at 12% per annum simple interest. On 13/11/2019, the Supreme Court dismissed the SLP.

9. The decision of the Supreme Court in BCCI v Kochi Cricket, (2018) 6 SCC 287 held inter alia that the amended Sec. 36(3), i.e., introduced by the 2015 amendment, would apply even to arbitration petitions that had been filed before the 2015 amendment.

10. By 2019, HAL had instituted execution proceedings and CPIPL had sought a stay of execution of the award and the decree.

11. It seems that it is in HAL's execution application (and in HAL's reply to CPI