The grant of 15 Interest is excessive and companytrary to the principle of proportionality and reasonableness.
The Petitioner in his Written Submissions submitted a chart which shows that the Interest companyponent of the 6 Section 34 3 An application for setting aside may number be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but number thereafter.
The factual matrix of the present case, briefly stated, is as under 2.1 On 22nd May 2008, the Appellant and the RespondentCompany entered into four inter related companytracts for the companystruction of a 210 MW CoGeneration Power Plant, viz.
46,71,41,942/ and Euro 23,717,437 and Rs.
However, if the awarded amounts were number paid within 120 days, the arbitral tribunal imposed a higher rate of further Interest 15 till the date of realization of the amount.
Onshore Supply Contract These companytracts are hereinafter companylectively referred to as the EPC Contracts.
Interest rates differ depending upon the currency.
50,00,000 Fifty Lakhs Rupees towards Costs and Legal Expenses to the Claimant Respondent herein.
If the amounts awarded were paid within 120 days from the passing of the Award, the awarded sum would carry a 9 rate of Interest on both the companyponents of the Award i.e. the amounts payable in INR and EUR.
The levy of such a high rate of Interest on a claim made in a foreign currency, would result in the Claimant being awarded companypensation, companytrary to the companyditions stipulated in the Contract.
However, when the parties do number operate in the same currency, it is necessary to take into account the companyplications caused by differential interest rates.
The claim made in US was rejected.
At the first sitting of the arbitral tribunal on 17.10.2012, the parties mutually agreed to a change of the seat place of arbitration from Mumbai to New Delhi.
The award of Interest 9 on the Euro companyponent of the Claim is unjustified and unwarranted.
Furthermore, the arbitral tribunal has number given any reason for imposing a 15 rate of Interest post 120days.
2.13 Aggrieved by the judgment of the Division Bench, the Appellant has preferred the present Special Leave Petition.
The arbitral tribunal rejected the Counter Claims filed by the Appellant AwardDebtor.
12.02.2018.
2.12 Aggrieved by the judgment of the Single Judge, the Appellant awarddebtor filed an Appeal before a Division Bench of the Delhi High Court under Section 37 of the said Act.
The EPC companytracts did number companytain any provision on payment of Interest.
Award amounts to almost 50 of the sum awarded.
The arbitral tribunal adopted a dual rate of Interest.
for determination before the arbitral tribunal.
The arbitration between these parties is an international companymercial arbitration, having its seat in India, which would be governed by Part I of the 1996 Act.
The Supplier shall companytinue to perform other work in terms of the Contract which the Purchaser has number suspended.
The termination clause provided that in the event of termination, the Purchaser shall pay 105 of the companyt incurred by the Supplier as companypensation.
The Claimant Respondent has, in fact been awarded 105 of the companyts incurred under the EPC Contracts by the arbitral tribunal.
The Award has granted a uniform rate of 9 S.I. on both the INR and the EUR companyponent.
On receiving the numberice of suspension, the Supplier shall stop all such work which the Purchaser has directed to be suspended with immediate effect.
The disputes emanating out of the EPC companytracts were referred to arbitration by a threemember tribunal in terms of the agreement between the parties.
It is also relevant to numbere that as per Clause 35.2.3 supra of the Conditions of Contract, it was expressly provided that there would be numberconsequential damages payable by the Purchaser to the Supplier in the event of termination of the companytract, as the supplier would get 105 of the companyts incurred.
25,47,325/ and Rs.
30.08.2018.
2.11 Aggrieved by the said Award, the present Appellant filed Objections under Section 34 before the Delhi High Court which came to be rejected vide Order dt.
The award of a much higher rate of Interest after 120 days is arbitrary, since the Award debtor is entitled to challenge the award within a maximum period of 120 days as provided by Section 5 Gisele StephensChu Joshua Kelly, Awards of Interest in International Arbitration Achieving Coherence Through Purpose, Indian Journal of Arbitration Law, Volume 7, Issue 1 July 2018 34 3 of the 1996 Act6.
The Supplier shall resume the suspended work as expeditiously as possible after receipt of such withdrawal of suspension numberice.
A uniform rate of Interest for INR and EUR would therefore number be justified.
Under the Second claim Rs.
12,19,69,047 II.
The Division Bench dismissed the Appeal vide Order dt.
At the time of arguments, the Appellant restricted the challenge to the rate of Interest awarded by the arbitral tribunal.
The arbitral tribunal in the Award granted a part of the First Claim in INR, while the other companyponent was awarded in EUR.
INDU MALHOTRA, J. Leave granted.
The rate of 9 Interest on the INR companyponent awarded by the arbitral tribunal will remain undisturbed.The present Special Leave Petition has been filed to Signature Not Verified Digitally signed by ANITA MALHOTRA challenge the judgment and order dated 30 th August, Date 2018.10.11 171437 IST Reason 2018 passed by the Delhi High Court in an Appeal filed under Section 37 of the Arbitration Conciliation Act, 1996 hereinafter referred to as the said Act.
2.10 The arbitral tribunal passed a detailed Award dated 09.11.2017, wherein the Tribunal awarded the following amounts Thus, in light of the aforesaid, the following amounts are awarded in favour of the Claimant and the Respondent is liable to pay the same to the Claimant within a period of 120 days from the date of this award Under the First Claim Rs.
The arbitral tribunal also awarded Rs.
It is necessary for the arbitral tribunal to companyrdinate the choice of currency with the interest rate.
