The court emphasized the importance of the arbitral tribunal providing reasons for its decisions, especially regarding unadjudicated claims for interest arising from wrongful invocation of guarantees.

JUDGMENT

[VIA HYBRID MODE]

Sanjeev Narula, J. (Oral)

I.A. No. 14363/2021 (filed by the Petitioner u/S. 34(4) & (5) of the Arbitration and Conciliation Act, 1996 [hereinafter, the `Act'] seeking adjournment of the instant proceedings to give Tribunal an opportunity to resume proceedings and eliminate the ground for setting aside the award)

1. At the outset, the instant application is not maintainable, having been filed at the instance of the party that is itself challenging the award. On this issue, this Court has already taken a view in ONGC Petro Additions Limited v. Tecnimont S.P.A. and Ors., MANU/DE/2047/2019. Mr. Pradeep Dewan, senior counsel, requests the Court to reconsider the said view, and relies primarily upon Kinnari Mullick v. Ghanshyam Das Damini, (2018) 11 SCC 328; Dyna Technologies Pvt. Ltd. v. Crompton Greaves Ltd., 2019 SCC OnLine SC 1656 and other decisions. The Court has considered this submission, but is unable to find any contradictory view in the afore-noted decisions. Besides, in Tecnimont (supra), this Court has examined the decision in Kinnari Mullick (supra), and is unable to comprehend the logic behind the Petitioner pressing the aforenoted provision for directing the Tribunal to provide reasons and findings for not granting interest. If the Petitioner's challenge can succeed on the ground of lack of supporting reasons, why would it insist contemporaneously that the ground for setting aside the arbitral award be eliminated? The language of the statute is clear, and following the view taken in Tecnimont (supra), the Court finds the application to be misconceived and not maintainable. Dismissed.

O.M.P. (COMM) 373/2016

2. The present petition under Section 34 of the Arbitration and Conciliation Act, 1996 [hereinafter, `the Act'] impugns the majority award dated 29th April, 2016 [The dissenting award is dated 7th April, 2016.], passed by a three-member Arbitral Tribunal in an arbitration between:

i. State Trading Corporation of India Limited (being Respondent No. 1 in both the proceedings) [hereinafter, `STC'];

ii. Canara Bank (being Respondent No. 2 during the arbitration, and the Petitioner in the present proceedings); and

iii. Helm Dungemittel GmbH, a German company in the business of fertilizers and crop-protection (being the Claimant in arbitration, and Respondent No. 2 in the instant proceedings) [hereinafter, `Helm']. For the sake of completeness, it is noted here that in arbitration, Helm also assumed the obligations of another party to the transaction -HypoVereinsbank, a German financial lending institution [hereinafter, `German Bank'].

FACTS

3. How did the disputes between parties stand referred to arbitration?

3.1. Helm entered into a contract dated 1st October, 2008 with STC for supply of 3 lakh tonnes [+/-10%] of urea, @ USD 685.50 per metric ton CFR [hereinafter, `the Contract']. Clause 13 of the Contract called for Helm to furnish an irrevocable performance bank guarantee in favour of STC, for 3% of the total contract value, through any first-class international bank having its branch office in New Delhi [hereinafter,`PBG']. Since Helm's banker (the German Bank) did not have any branch office in New Delhi, it mandated Canara Bank to issue a PBG of USD 67,86,450/- in favour of STC. This PBG was duly secured by a back-to-back counter-guarantee issued by German Bank in favour of Cana