The obligation of the Arbitral Tribunal to provide reasons for rejecting claims and the limited scope of jurisdiction under Section 34 of the Arbitration and Conciliation Act, 1996.

JUDGMENT

Navin Chawla, J. (Oral)

1. This petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') challenging the Award dated 13.05.2016 passed by the learned Sole Arbitrator to the limited extent that while awarding the amount of Rs.51,43,248/- to the petitioner towards the Performance Bank Guarantee, the learned Sole Arbitrator has awarded interest only with effect from the date of the Award, i.e., 13.05.2016 till the date of the payment.

2. It is the case of the petitioner that the petitioner had claimed interest on the above amount from the date of the encashment of the Performance Bank Guarantee, i.e. 04.03.2010, till the invocation of the arbitration, i.e. 15.04.2013 as also the pendente-lite and future post- Award interest.

3. The learned counsel for the petitioner contends that leave alone giving any reason for not allowing the above claim, the above claim appears to have completely missed the consideration of the learned Sole Arbitrator.

4. On the other hand, the learned counsel for the respondent submits that the respondent had also challenged the Impugned Award by way of a petition under Section 34 of the Act. The same was dismissed by this Court; appeal there against has also been dismissed. She submits that, therefore, the Award has attained finality and the present petition is not maintainable.

5. She further submits that in the Impugned Award, the learned Arbitrator found that the petitioner had sold the Yellow Peas to a third party and, therefore, was in breach of the Agreement between the parties. The learned Sole Arbitrator has, however, awarded refund of the Performance Bank Guarantee only on account of the fact that the respondent was unable to show any loss suffered by the respondent due to such breach of the contract by the petitioner. She submits that the learned Sole Arbitrator has, therefore, refused to award interest in favour of the petitioner. She submits that this finding is rendered by the learned Sole Arbitrator in paragraph 8.5 (iv) of the Impugned Award.

6. I have considered the submissions made by the learned counsels for the parties.

7. The petitioner had raised the following claims before the learned Sole Arbitrator:

"(i) Rs.1,59,97,995/- due to sale on lesser rate of 6283.580 MTs with 18% interest from 16.04.2013 till actual realization;

(ii) Sum of Rs.51,43,248/- towards the so-called illegal encashment of bank guarantee by the respondent with 18% interest from 16.04.2013 till actual realization;

(iii) Sum of Rs.9,33,138/- towards storage charges with 18% interest from 16.04.2013 till actual realization;

(iv) Rs.50 lakhs towards business loss with 18% interest from 16.04.2013 till actual realization;

(v) Interest of Rs.62,52,805/- @14% per annum on the aforesaid sum of Rs.1,59,97,995/- from 01.07.2010 to 15.04.2013;

(vi) Interest of Rs.22,44,993/- from 04.03.2010 till 15.04.2013 @14% on Rs.51,43,248;

(vii) Interest of Rs.3,70,443/- from 15.06.2010 till 15.04.2013 on storage charges@ 14%."

(Emphasis supplied)

8. On pleadings of the parties, the learned Sole Arbitrator framed the following issues:

"8.3 On the basis of the pleadings of both the parties and discussions with them on 03.12.2013, the following issues were framed:

(i) Whether the claimant is entitled to a sum of Rs.51,43,248/- on account of encashment of bank guarantee by the respondent?

(ii) Whether the claimant is entitled to any damages, storage charges, loss and mesne profit? If so, at what rate and on what amount?

(ii) Whether the claimant is entitled to loss on total sale of Rs. 1,59,97,995/- on the sale of 6283.580 MTs of Yellow Peas and business loss amounting to Rs.50,00,000/- (Rupees Fifty Lakhs)

(iii) Whether the claimant is entitled to any interest? If so, on what amount, at what rate and from which date?

(v) Cost."

(Emphasis supplied)

9. Therefore, not only did the petitioner claim interest from the date of encashment of the Performance Bank Guarantee, but