Point of Law: Agreement - Arbitral award - Award based on settlement between parties - BLS had disputed that there was deficiency in rendering VISA Services but had subsequently, without prejudice to its contention, offered to settle the disputes by paying an annum.

JUDGMENT :

VIBHU BAKHRU, J.

1. The petitioner (hereinafter ‘BLS’) has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter the ‘A&C Act’) impugning an arbitral award dated 04.03.2020 (hereinafter ‘the impugned award’) delivered by the Arbitral Tribunal constituted of a Sole Arbitrator.

2. The impugned award was rendered in the context of the disputes that have arisen between the parties in connection with an Agreement dated 12.09.2013 whereby the respondent (hereinafter ‘Digicall’) had agreed to provide Call Centre Operation Services to BLS. By the impugned award, the Arbitral Tribunal has awarded a sum of $23,366.16/- plus $4,344/- (aggregating to $27,710.16/-) in favour of Digicall on account of payments due for services rendered by it.

3. The Arbitral Tribunal further held that withholding of the said amount by BLS was unjustified and had caused wrongful loss to Digicall. Accordingly, the Arbitral Tribunal also entered an award for preference interest on the said amount, at the rate of 9% per annum from the date of filing the suit [C.S. (OS) No. 3723/2014, which was filed on 29.11.2014 before this Court] till the date of the award. In addition, the Arbitral Tribunal also awarded future interest at the rate of 11% per annum on the awarded amount from the date of the impugned award till the date of realization, in the event the awarded amount was not paid within a period of thirty days from the date of the impugned award. In addition, the Arbitral Tribunal had also awarded costs in favour of Digicall. BLS had also preferred counter claims but the same were rejected by the Arbitral Tribunal.

4. The controversy in the present case arises in the following context:

4.1 On 17.05.2013, BLS was awarded a contract by the Embassy of India, Washington DC for providing certain services for processing of visas, other consular and allied services (hereinafter ‘VISA Services’). BLS submits that it was approached by Digicall for providing Call Centre Operation Services (hereinafter ‘Call Centre Services’) in respect of telephone calls originating from United States of America (USA) and Canada by applicants/prospective applicants for visas. BLS claims that the Call Centre Services were vital for BLS to render VISA Services to the Embassy of India, as contracted in terms of the Agreement dated 17.05.2013 entered into with the Embassy of India, Washington DC.

4.2 After certain negotiations, Digicall sent an email dated 01.06.2013, whereby Digicall agreed to provide the Call Centre Services for an initial period of sixty days, provided the said term was further extendable by thirty days on mutually agreed terms.

4.3 BLS claims that on 19.05.2013, the Embassy of India in Washington DC imposed a penalty of $181,852.68/- on account of deficiency in VISA Services provided by BLS. BLS claims that the deficiency in VISA Services provided by it was on account of deficiency on the part of Digicall in providing the Call Centre Services.

4.4 On 12.09.2013, BLS entered into an agreement with Digicall (hereinafter ‘the Agreement’) whereby Digicall agreed to provide the Call Centre Services to BLS for the consideration stated therein.

4.5 BLS submits that the Call Centre Services provided by Digicall were deficient and it had received several complaints in that regard. Further, BLS claims that it had sent several communications to Digicall pointing out certain deficiencies and expressing dissatisfaction as to the quality of the Call Centre Services being provided by Digicall.

4.6 By an email dated 15.01.2014, BLS terminated the Agreement with Digicall. Immediately thereafter on 17.01.2014, Digicall called upon BLS to clear the outstanding amount of $108,906.11/-. BLS disputed the said amount and declined to pay the same.

4.7 On 29.11.2014, Digicall filed a Summary Suit being C.S. (OS) No. 3723/2014 in this Court seeking recovery of Rs. 65,34,366.60/- (Rupees Sixty-Five Lacs Thirty-Four Thousand Three Hundred Sixty-Six a