An arbitrator must adhere to the contractual terms regarding interest, and if parties explicitly waive interest claims, such claim cannot be awarded under Section 34 of the Arbitration and Conciliation Act, 1996.

ORDER

Chandra Dhari Singh, J. (Oral)

I.A. 9233/2021 (Delay)

1. This is an application under Section 5 of Limitation Act, 1963 on behalf of the petitioner for condonation of delay in filing the rejoinder to the reply of the respondent.

2. For the reason stated in the application, the delay of 80 days in filing the rejoinder to the reply of the respondent.

3. The application is disposed of.

O.M.P. (COMM) 574/2020

4. The instant petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "The Act, 1996") has been filed on behalf of the petitioner seeking the following relief:

"(a). Allow the present Petition and set aside the Award dated 10.08.2020 only in respect of Claim no. 2..."

5. The brief facts of the case are that the Petitioner is a company registered under the Companies Act, 1956, having its office at A-22, Phase-II, District Gautam Budh Nagar, Noida-201305, U.P. and the Respondent is a public sector undertaking having its registered office at Deen Dayal Urja Bhawan, 5, Nelson Mandela Marg, Vasant Kunj, New Delhi-110070. The Respondent floated a tender bearing no. ZNJMC10004 for procurement of Truck mounted heavy-duty dual skid Hydraulic Single Drum Wireline Winch Units. Accordingly, the Petitioner submitted its Bid No. UDT/MKTG/EBID/2010-11/514 dated 31st January, 2011 for supply of 17 Nos. Wireline Winch Units. The bid of the Petitioner was accepted by the Respondent and the Respondent issued NOA dated 28th September, 2011 to the Petitioner and, thereafter, the Respondent issued Purchase Order dated 24th February, 2012 in favour of the Petitioner. Thereafter, the Petitioner supplied 17 nos. of wireline winch units well within time. But, the Respondent illegally, unlawfully, mala fidely and unconstitutionally deducted USD 1,46,400 from the Petitioner's account towards alleged Liquidated Damages, arising disputes and differences between the parties. Accordingly, the Respondent vide letter dated 17th January, 2019 appointed Shri P. K. Jain as sole Arbitrator for adjudication of disputes and differences between the parties.

6. The learned Arbitrator passed the Award dated 10th August, 2020 whereby the claim no. 1 of the Petitioner pertaining to refund of Liquidated damages amounting to USD 1,46,400 was allowed but the claim no. 2 which pertained to award of interest on withheld sum was declined.

7. Being aggrieved by the part of award (claim no. 2), the Petitioner has filed the present objection Petition.

8. Learned counsel appearing on behalf of the Petitioner submitted that as per law if a person is deprived of the money which he is legitimately entitled to, the said person is liable to be compensated in form of interest or damages. Since the learned Arbitrator came to the conclusion that withholding of USD 1,46,400 by the Respondent is illegal and had wrongly imposed Liquidated Damages on the Petitioner, the Petitioner ought to have been granted the interest on the said amount which had been illegally withheld by the Respondent. It is further submitted that the circular dated 17th August, 2020 issued by the Respondent clearly entitles the Petitioner to get interest, being a small-scale industry.

9. It is submitted by learned counsel appearing on behalf of the Petitioner that the Respondent never filed any counter claim against the Petitioner nor could justify the withholding of USD 1,46,400 for nine years. Therefore, the Petitioner is very much entitled to interest on withheld amount. It is further submitted that the learned Arbitrator is empowered to grant Pendente-lite and future interest on the sum awarded in the Award. It is a