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IN THE HIGH COURT OF JUDICATURE AT MADRAS
P.T. ASHA, J.
M/s. Suryadev Alloys & Power Pvt. Ltd., Rep. by its Authorised Signatory, Govind Gagoria & Another - Appellant
Versus
M/s. Shri Govindaraja Textiles Pvt. Ltd. Rep. by its Director, Aruppukottai & Another - Respondent
O.P.Nos. 955 of 2019 & 15 of 2020
Decided On : 08-05-2020
Arbitration and Conciliation Act, 1996 - Section 34 - Counter claim to award amount - Appointment - Terms and conditions as may be imposed by Court - Question that arises for consideration in this petition is validity of Award passed year after period fixed by Court had lapsed has been filed by claimant challenging award in as much as Arbitrator had failed to award pendent late interest and filed by respondent challenging same award primarily on ground that award had been passed after mandate of Arbitrator had terminated - Since issue involved is purely legal issue facts giving rise to instant petitions are reproduced in brief herein below and parties are referred to in same ranking as before Arbitral Tribunal – Held, Honble Supreme Court - Engineering Private Ltd - Wherein Arbitrator had failed to make award even after time was extended till consent of both parties - Thereafter one of the parties had moved Court to terminate mandate of Arbitrator and High Court of Calcutta had terminated mandate - Order was by Honble Supreme Court and Bench had observed as follows’With reference to contention made by appellant that arbitrator having concluded proceedings could not be said to have failed to act so as to attract provisions of Section Act which will call for termination arbitration proceeding - It is pertinent to mention here that arbitrator had not concluded proceedings as had been agreed to by parties within time fixed for doing - Mandate of arbitrator was terminated only because of fact that arbitrator having failed to conclude his proceedings within time did not warrant to be continued as arbitrator in absence of consent of both parties - It is clear from bare reading of subsection of Section Act mandate of an arbitrator shall terminate if he fails to act without undue delay - Present case it is clear that arbitrator had extended time provided to it without any concrete reasons whatsoever and thus his mandate was liable to be terminated – Sub section further states that mandate of an arbitrator shall also stand to be terminated if he withdraws from his office or parties agree to termination of his mandate – Appeal dismissed
JUDGMENT
(Prayer in O.P. No.955 of 2019: Original Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the award dated 13.09.2019 in so far as Non-Award of interest for the period from 17.06.2016 to 13.09.2019 made in A.F.No.73 of 2017 on the file of the Hon'ble Sole Arbitrator Mr. Justice R.S. Ramanathan and consequently direct the respondent to pay the interest at the rate of 18% per annum to the award amount of Rs.1,49,95,039/- from 17.06.2016 till the date of award.
O.P. No.15 of 2020: Original Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the award dated 13.09.2019 made in A.F.No.73 of 2017 on the file of the Hon'ble Sole Arbitrator Mr. Justice R.S. Ramanathan and consequently direct the respondent to pay a sum of Rs.13,80,864/- to the petitioner herein together with interest at the rate of 18% per annum from the date of counter claim to the award amount of Rs.1,49,95,039/- from 17.06.2016 till the date of award.)
Common Order:
The question that arises for consideration in this petition is the validity of the Award passed a year, after the period fixed by Court had lapsed. O.P. No.955 of 2019 has been filed by the claimant challenging the award in as much as the Arbitrator had failed to award pendente lite interest and O.P. No.15 of 2020 is filed by the respondent challenging the same award primarily on the ground that the award had been passed after the mandate of the Learned Arbitrator had terminated.
2. Since the issue involved is purely a legal issue, the facts giving rise to the instant petitions are reproduced in brief herein below and parties are referred to in the same ranking as before the Arbitral Tribunal.
3. The Claimant would contend that they had entered into a Power purchase agreement with the respondent and that the respondent had failed to clear the invoices. As on 27.04.2016 a sum of Rs.3,91,78,799/- was due from the respondent. The claimant had invoked the Bank Guarantee and received a sum of Rs.2,41,43,760/- leaving a balance of Rs.1,49,95,039/- as on 16.06.2016. Despite the legal notices dated 21.06.2016 and 01.08.2016, the respondent did not come forward to clear its dues but on the contrary, claimed production cost of Rs.2,16,86,400/-. Therefore, they had invoked the Arbitral Clause in the Power purchase agreement and appointed one Dr.C. Ravichandran, Advocate as their Arbitrator. The Respondent had not given their consent constraining to the petitioner to move this Court by filing an petition in O.P. No.807 of 2016 under Section 11 of the Arbitration and Conciliation Act, 1996, (hereinafter called as "the 1996 Act"). This Court by order dated 17.03.2017 was pleased to appoint a Sole Arbitrator, who by his notice dated 20.03.2017 had entered reference.
4. Per contra, the respondent would contend that after April, 2015, the Claimant had not allotted Power as per the contracted demand of energy and by 30.09.2015 had completely stopped the Power supply. However, the Claimant had raised a Debit Note for Rs.1,62,82,600/- on 30.09.2015. The respondent sent a reply dated 07.10.2015 highlighting the fact that on account of the non-supply, the respondent had to purchase power from TANGEDCO for which they had to pay an excess sum of Rs.13,80,864/-. The claimant thereafter, withdrew the Debit Note but did not come forward to pay the sum of Rs.13,80,864/-. Apart from this sum, the respondent had suffered a loss of Rs.2,16,86,400/- on account of the failure to supply power. The respondent therefore, raised a counter claim for Rs.2,30,67,264/-.
5. The Learned Arbitrator by his Award dated 13.09.2019 had allowed the claim filed by the claimant but had granted interest only from the date of the Award. The Counter claim filed by the respondent was rejected. Challenging this Award, the claimant and the respondent are before this Court.
6. The Counsel for the petitioner in O.P. No.15 of 2020 who is the respondent in O.P. No.955 of 2019, contend
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