Executing courts must adhere to the original arbitral award terms regarding interest calculations, ensuring pre-award interest is applied correctly without modifying it into compound interest.

JUDGMENT AND ORDER

The order dated 05-02-2025 passed in Commercial Arbitration Execution No. 2/2024 by the Judge, Commercial Court, Shillong is called in question by the petitioner in this revision petition. By the order dated 05-02-2025, the learned Commercial Court rejected the objection filed by the petitioner/award debtor to the calculation sheet submitted by the respondent/award holder in the executing proceeding.

1. On 01-03-2012, the respondent was awarded a contract by the petitioner under Agreement No.NESH/CSM/O&M/1500- 145/CA/3325 for work of construction of Pile Foundation at location 42 of 400KV D/C Ranganadi Balipara Line. Due to the existing dispute between the parties, the matter was referred to arbitration and an Arbitral Tribunal was constituted. The Arbitral Tribunal after thorough adjudication passed an award on 30-12- 2016 in favour of the respondent. The petitioner challenged the award by preferring an application under Section 34 of the Arbitration and Conciliation Act, 1996 , which was dismissed vide judgment dated 22-12-2023 passed in Commercial Arbitration Case No.14 of 2018. The petitioner made no further challenge to the said arbitral award by preferring any appeal under Section 37 of the Arbitration and Conciliation Act, 1996 . Thereafter, the respondent instituted Commercial Arbitration Execution No. 2/2024 for execution of the arbitral award dated 30-12-2016 before the Judge, Commercial Court, Shillong (hereinafter referred to as the Executing Court) to recover Rs. 3,87,46,270.18/- (rupees three crores eighty-seven lakhs forty-six thousand two hundred seventy and eighteen paise) as on 29-02- 2024 plus daily interest of Rs. 9171.68 till the date of payment. The petitioner deposited a sum of Rs. 2,98,94,010 on 16-07-2024 by a demand draft which was handed over to the respondent. The petitioner also filed objection to the calculation made by the respondent and submitted a separate calculation sheet. According to the petitioner, the total amount payable by the petitioner as on 16-07-2024 was Rs. 2,98,94,010 and after the deposit of the demand draft, the arbitral award stood satisfied. The Executing Court after hearing the parties, by impugned order dated 05-02- 2025 rejected the objection filed by the petitioner and directed for payment of the remaining amount within a period of one month. Being aggrieved, the petitioner has preferred this revision petition before this Court.

2. Assailing the impugned order, Mr. A. Kumar, learned Senior Counsel assisted by Mr. N. Khera, learned Counsel appearing for the petitioner submits that the learned Executing Court has travelled beyond its jurisdiction by granting interest on a sum distinct from what has been awarded by the Arbitral Tribunal. He submits that the Arbitral Tribunal in the award dated 30-10-2016 specifically directed that simple interest be paid on the awarded amounts of Rs.1,26,55,793/- and Rs.5,32,096/- w.e.f. 05-07-2013 and 21-03-2015 respectively till the date of payment, but the Executing Court has effectively modified the award and converted simple interest into compound interest by accepting the method of calculation of the respondent. Relying on the decisions of the Apex Court in Sarup Singh v. Union of India , (2011) 11 SCC 198 and in Meenakshi Sxena v. ECGC Ltd., (2018) 7 SCC 479, he submits that the Executing Court is bound by the arbitral award and has no power to modify or interpret it. He further submits that