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SENTHILKUMAR RAMAMOORTHY
Union of India – Appellant
Versus
R. K. Constructions – Respondent
ORDER :
PRAYER: Petition filed under Section 34(2)(a)(iv), (b)(ii) of the Arbitration and Conciliation Act, 1996 as amended by amendment Act 2015, praying to set aside the Arbitral Award passed by the learned Arbitrator herein dated 20.04.2021 made in relation to disputes arising out of Agreement No.329/CN/2005 dated 13.10.2005 in so far as Claim No.4(award of pendente lite interest @ 12% p.a.) for a sum of Rs.7,31,785/- from 28.08.2007 to till the date of award (i.e.) 20.04.2021 is concerned.
The dispute before this Court lies within a narrow compass: the petitioners assail the arbitral award dated 20.04.2021 (the Award) in respect of the grant of pendente lite interest under Section 34 of the Arbitration and Conciliation Act, 1996 (the Arbitration Act).
2. A contract was awarded by the petitioners to the respondent in relation to the collection, supply and related activities as regards machine crushed hard granite stone ballast between specified segments of the Turinjapuram and Thiruvannamalai stations, Reach VIII. In this connection, letter of acceptance dated 10.06.2005 (the LoA) was issued to the respondent. This was followed by an agreement dated 13.10.2005 (the Agreement). The
The Arbitral Tribunal's authority to award interest is governed by the arbitration agreement, with specific provisions for pre-award and post-award interest under the Arbitration Act.
The arbitral tribunal can award pendente lite interest unless expressly barred by the agreement between the parties.
The courts have a limited scope of interference under Section 34 and 37 of the Arbitration Act, and the Arbitral Tribunal's detailed consideration of evidence and claims is final.
(1) Arbitrator in arbitration proceedings being creature of contract has no power to award interest, contrary to terms of agreement/contract between parties.(2) There cannot be estoppel against law.
The arbitral tribunal can award pendente lite interest unless expressly prohibited by the contractual agreement.
(1) If contract contains a specific clause which expressly bars payment of interest, then it is not open for Arbitrator to grant pendente lite interest.(2) Lawful agreement to refer the matter to arb....
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