The court affirmed that an arbitral tribunal’s interpretation of a contract is binding if plausible, emphasizing limited grounds for interference under the Arbitration Act, especially in international commercial arbitration.

JUDGMENT :

SACHIN DATTA, J.

1. These cross-appeals have been filed under Section 37(1)(c) of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as the “A&C Act”), challenging the judgment dated 28.02.2019 (hereinafter referred to as the “Impugned Judgment”) passed by the learned Single Judge in OMP No. 76 of 2015. The said petition was filed by the Steel Authority of India Limited (hereinafter referred to as “SAIL”) under Section 34 of the A&C Act, assailing an arbitral award dated 20.08.2014 (hereinafter referred to as the “Original Award”) rendered by an Arbitral Tribunal comprising of three arbitrators: Capt. Satish P. Anand (Presiding Arbitrator), Capt. S.M. Berry, and Mr. Niranjan Chakraborty (hereinafter referred to as the “Arbitral Tribunal”).

2. By the Original Award, the Arbitral Tribunal awarded a net sum of USD 14,049,506.74, which was determined after deducting a 2.5% commission payable to the Charterers and a 1.25% brokerage fee. Additionally, the Arbitral Tribunal awarded an amount of USD 100,000.00 towards legal fees and expenses. The costs of the arbitration, including fees and expenses of the arbitrators and administrative fees of the Indian Council of Arbitration, were fixed at INR 19,60,000. Furthermore, an amount of INR 4,90,000 was awarded to be paid to each arbitrator in accordance with Indian Council of Arbitration rules, and an additional INR 4,90,000 was awarded towards Indian Council of Arbitration administrative fees. Additionally, the Tribunal awarded interest at the rate of 6% per annum from 01.12.2012, until the publication of the award on the net sum of USD 14,049,506.74, and thereafter at 6% per annum until the total awarded amount is fully paid.

3. In the proceedings under Section 34 of the A&C Act, SAIL highlighted that the Arbitral Tribunal had not provided reasoning for its conclusions on certain issues. In light of this, the learned Single Judge, on 22.02.2017, directed the Arbitral Tribunal to reconvene and provide reasons in respect of the specified issues. Complying with this directive, the Arbitral Tribunal passed an Additional Award on 10.06.2017 (hereinafter “Additional Award”) detailing its reasoning for the specified issues of the Original Award. Hereafter, the Original Award and the Additional Award will collectively be referred to as the “Impugned Award.”

4. The learned Single Judge partly allowed SAIL’s petition and set aside the impugned award to the extent of damages computed for the quantity of coal that would have been shipped after the termination of the Agreement till December 2012. It was held that the agreement stood validly terminated by SAIL vide communication dated 11.09.2012 under Clause 62 of the Agreement. The learned Single Judge made the following observations in the impugned Judgement –

“63. Having said so, the Arbitral Award, insofar as it awards damages for the quantity of coal that would have been shipped after the termination of the Agreement till December 2012, cannot be sustained as the exercise of power by the petitioner under Clause 62 of the Agreement has been held to be valid in this order.

64. As the shipment was to be made on “evenly spread per month basis”, the amount due to the respondent would be reworked by taking the Shipment quantity that was due till the date of termination of the Contract.”

5. Additionally, the learned Single Judge modified the award of interest in line with the Hon’ble Supreme Court’s decision in Vedanta Ltd. v. Shenzen Shandong Nuclear Power Construction Co. Ltd , 2018 SCC OnLine SC 1922, setting it at the London Inter Bank Offered Rate (LIBOR).

6. M/s. Seaspray Shipping Co. Ltd. (hereafter Seaspray) has assailed the impugned judgment to the extent that the Impugned Judgment has reverse