JUDGMENT :

BORANA, J.

1. The present appeal has been preferred against the order dated 03.02.2023 passed by the Commercial Court No.2, Jodhpur (hereinafter referred to as ‘the learned Court below’) in Civil Misc. Case No.20/2022 (NCV No.32/2020) whereby the objections under Section 34 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act of 1996’) preferred by the appellants against the award dated 26.12.2002 passed by learned Arbitrator have been rejected. Vide the award, the learned Arbitrator had proceeded on to pass an award for a total amount of Rs.15,19,732/-in favour of the claimant-firm with past and pendente lite interest from 01.01.1995 to 26.12.2002 on claim Nos.1 & 2. The rate of interest as awarded on claims no.1 and 2 was @ 15% per annum from 01.01.1995 till 31.03.1998 and @ 12% per annum from 01.04.1998 till the date of award. The rate of interest as awarded on claim No.3 from 01.04.1998 to 26.12.2002 was @ 12% per annum. Future interest has been granted w.e.f. 01.04.2003 @ 10% per annum.

2. The facts of the case are as under:

(A) Agreement No.CEAZ/UTL/06 of 88-89 was entered into between appellant no.3 and respondent no.1 firm for “Provision of Technical Structure at Uttarlai”. The stipulated date for commencement of work was 28.09.1988 and for completion of work was 27.03.1991. However, the same was extended up to 31.03.1994 which was also the actual date of completion. On 15.04.1994, respondent no.1 submitted the final bill under protest. On 14.06.1996, appellants made full and final payment of the said bill.

(B) The firm, vide letter/notice dated 14.10.1996, invoked arbitration clause i.e., clause 70 of the agreement for adjudication of disputes. The firm raised and annexed therewith two Appendixes of disputes/claims “A” & “B” and prayed for reference of the same to arbitration. However, the disputes/claims as raised vide Appendix-A were only referred to arbitration by the Department.

(C) The claims raised vide Appendix-B were not referred by the department on the premise that they fall into the category of “non-arbitrable/excepted matters” and, therefore, cannot be referred to arbitrator. This impasse led to filing of application under Section 11 of the Act of 1996 before the Designated Authority who allowed the said application vide order dated 19.12.1997 and issued direction to the effect that the claims included in Appendix-B also be referred to the Arbitrator already appointed. Aggrieved against the order dated 19.12.1997, a writ petition was preferred by the Union of India which was allowed vide order dated 03.12.1998 and the learned Single Judge of this Court held that the Designated authority had no jurisdiction to refer claims forming part of Appendix-B. The order dated 3.12.1998 was assailed by the respondent firm in special appeal and the Division Bench while allowing the special appeal, set aside the order dated 03.12.1998 and directed for reference of the claims raised in Appendix-B to the Arbitrator. However, the Union of India was granted liberty to raise the question of the claims being outside the scope of arbitration before the Arbitrator and it was further directed that the Arbitrator would be free to decide any such question raised before him in accordance with law. The Division Bench, while allowing the special appeal, directed the matter to be listed again before the Designated Authority for passing the appropriate orders of reference to the Arbitrator in light of the decision as passed by the Division Bench.

(D) In pursuance to the directions as issued by the Division Bench, the Designated Authority proceeded on to refer the disputes covered vide Appendix-B also to the same Arbitrator.

(E) The Arbitrator so appointed subsequently retired and therefore, again an application under Section 11 of the Act of 1996 was moved before the Designated Authority and the Designated Authority