The court emphasized the discretion of arbitrators in granting interest and upheld the validity of the award, highlighting the principle that courts cannot re-assess and re-examine the merit of the award.

MUKUNDAKAM SHARMA, J.

( 1 ) - The appellant herein awarded a contract for the consultancy regarding construction of a private railway siding at Maniqui railway Station on South East Railway. In terms of the aforesaid contract the respondent was to provide professional services to the appellant comprising engineering, design, supervision and quality control on the work of the contractor and measuring the work done and arranging payment to the contractor.

( 2 ) DURING the execution of the aforesaid contract certain disputes and difference arose between the parties regarding payments and liabilities thereto. The said disputes were referred to arbitration in terms of Clause 11 of the agreement between the parties. In terms of the said arbitration Clause, two arbitrators were appointed, one by each of the parties. After hearing the parties and on perusal of the pleadings and the statements of claims on behalf of the parties and also the documentary and oral evidence produced by them, the arbitrators passed an award which was published on 3rd April, 1996.

( 3 ) THE respondents filed a petition under Section 17 of the Arbitration Act, 1940 to make the said award, as given by the learned arbitrators, a rule of the Court whereas the appellant herein filed an objection to the award under Sections 30 and 33 of the Arbitration Act praying for setting aside the impugned award dated 3rd april, 1996.

( 4 ) THE learned Single Judge heard the objection as also the petition praying, inter alia, for making the award a rule of the Court and after hearing the parties, dismissed the objection filed by the appellant herein. The learned Single Judge also passed an order making the award a rule of the Court. Being aggrieved by the said order, the present appeal has been preferred by the appellant herein, on which we have heard the learned Counsel for the parties. Our attention was also drawn by the Counsel appearing for the parties to the various documents placed on record including the award passed by the arbitrators.

( 5 ) ON perusal of the impugned judgment and order we find that primarily two contentions were advanced before the learned Single Judge, which is clear on a bare reading of para 2 of the impugned judgment and order. The first contention that was urged was that the award passed by the arbitrators was beyond the statutory period and since no extension was granted to the arbitrators, they became functus officio when they published the award. The second contention that was raised was in respect of the rate of interest which was awarded in favour of the respondent, which was fixed by the arbitrators at 18% p. a. effective from the date of the impugned award.

( 6 ) THE learned Single Judge considered both the aforesaid submissions made before them. It was held that time for publishing the award could also be extended even after the award is passed. Consequently, it was held that time for publishing the award stood extended, as is available to the arbitrators, till the time when the award was published. So far the second contention is concerned, it was held that it is settled law that grant of interest is within the discretion of the arbitrators and, therefore, the arbitrators had power and jurisdiction to award interest at 12% p. a for some of the claims and for the period mentioned therein, whereas for the other claims and for the period mentioned at 18% p. a. While coming to the aforesaid conclusions, support was also drawn from the provisions of Clauses 4. 7 and 5. 1. 3 of the agreement between the parties, which provided for grant of interest on delayed payments.

( 7 ) COUNSEL appearing for the appellant, however, submitted before us that so far the first contention before the learned Single Judge was concerned, the same was not being pressed before us. We accept the aforesaid submission of the Counsel for the appellant. Therefore, the findings recorded by the learned Single Judge holding that the award, which was published by the