Interim awards may be issued by arbitral tribunals, and reliance on evaluation reports constitutes admissible evidence binding on parties, restricting challenges based on liability admissions.

JUDGMENT :

M. S. Ramachandra Rao, C.J.

This Commercial Appeal is preferred by the appellant herein, challenging an order dt. 29.05.2024 in Commercial Arbitration Case No.02/2023 passed by the Additional Judicial Commissioner-III-cum-Presiding Officer, Commercial Court, Ranchi.

2. The appellant had filed the said Commercial Arbitration Case before the said Court challenging the interim Arbitral Award dt. 04.11.2022 passed by the learned Arbitral Tribunal of Hon’ble Justice Amareshwar Sahay (Retd.).

3. The main contention raised before the court below by the appellant was that the interim Award was given by the Arbitral Tribunal erroneously holding that the awarded amount was an admitted amount, that there was no such admission of liability and this was the error apparent on the face of record in the Arbitral Award.

4. As per the order of the trial court, there was a letter addressed by the Joint Secretary of Government to the Joint Secretary of the Transport Department forwarding the report of an Evaluation Committee, appointed by the appellant, which assessed the work done by the respondent for the appellant; and the Arbitral Tribunal had based its decision on such Evaluation Committee’s report and also awarded interest on the sum of Rs.10,06,71,702/-.

5. Before the court below, the submissions made by the appellant were considered and the Court recorded a finding that the appellant had made submissions as if the application under Section 34 of the Arbitration and Conciliation Act, 1996 was an appeal, though there was limitations under Section 34 of interfering with an Arbitral Award, as held by several decisions of the Supreme Court.

6. The court below also held that the Arbitral Tribunal had the power to grant an interim Award and the Evaluation Committee’s report was in respect of the work done when the work was unilaterally stopped by the appellant. It also recorded that though other issues remained to be decided that is not the reason why the grant of interim Award can be faulted and that the appellant failed to show that the Award is against the public policy of India or it shocks the conscience of the Court or it is in violation of any law and that there is an error apparent on the face of record. It is also observed that application under Section 34 of the Act is not an appeal and the evidence cannot be re-appreciated.

7. The court below held that the document on which the Arbitral Tribunal relied for granting interim Award is the report of an Evaluation Committee, which was deciding the claim of the respondents for payment and the contents of the report of the Evaluation Committee would amount to an admission, which would be binding on the appellant precluding it from challenging the Award.

8. The perusal of the interim Award shows that the main objection raised by the appellant before the Arbitrator was that interim Award cannot be passed by the Arbitrator on an interim application filed by the respondent and it can only be decided at the stage of final hearing of the case. This view is contrary to law as undoubtedly the arbitral tribunal has power to pass an interim award in certain circumstances.

9. The Award also records that there was a letter written by the Chief Secretary contained in Annexure-CD-24 of the statement of claim made before the Arbitrator and Annexure-1/A to the interlocutory application, which was the Five Member Evaluation Committee’s Report and these were not disputed by the appellant. The Arbitrator also noted that the total claim of the respondent was Rs.173.24 crores and in the interim Award on the basis of the above documents only Rs.10,06,71,702/- is being awarded, since the Evaluation Committee evaluated the actual work done by the respondent and came to the de