The Energy Of The Arbitral Tribunal To Award The Declare For Curiosity Is Amenable To Occasion Autonomy – Trials & Appeals & Compensation – India


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The idea of ‘Occasion Autonomy’, having held the centre
stage and being the main target of the complete arbitration course of, this
precept additionally got here to be utilized in figuring out the ability of the
Arbitral Tribunal within the matter of grant of curiosity. Just lately the
Hon’ble Supreme Court docket of India was referred to as upon to adjudge on
this situation when it was noticed that an arbitrator is a creature of
a contract and is equally certain by it. The Hon’ble Supreme
Court docket held that the discretion with regard to grant of curiosity is
accessible to the Arbitral tribunal solely when there isn’t a settlement
on the contrary between the events. This text endeavours to
analyse the attitude of the Hon’ble Supreme Court docket in
making use of the ideas of ‘occasion autonomy’ within the matter
of train of discretion by the Arbitral Tribunal for grant of
curiosity.

FACTS OF THE CASE:

Appellant- Delhi Airport Metro Categorical Personal Restricted
(hereinafter known as “DAMEPL”) and the Respondent-
Delhi Metro Rail Company (hereinafter known as
“DMRC”) entered right into a Concession Settlement dated
25.08.2008. As per the Settlement, DMRC needed to perform civil works
and DAMEPL needed to execute the stability work. It’s pertinent to
spotlight right here that as per Article 29 of the Concession Settlement,
within the occasion of termination, it was the respondent-DMRC, which was
liable to make Termination Fee.

Subsequently, DAMEPL terminated the Concession Settlement by
Termination Discover dated 08.10.2012 and DMRC referred the dispute
to Arbitration on 23.10.2012. An arbitral Award got here to be handed
on 11.05.2017. Since, DMRC was aggrieved by the award, it filed a
petition underneath Part 34 of the 1996 Act difficult the award
dated 11.05.2017. Delhi Excessive Court docket upheld the award vide order
dated 06.03.2018 which on the additional problem earlier than Supreme
Court docket was additionally upheld on 09.09.2021. DAMEPL instantly filed
Execution Petition earlier than Delhi Excessive Court docket on 12.09.2021. Within the
mentioned proceedings, a competition was raised on behalf of DAMEPL which
is the problem within the current article that the sum as specified underneath
Clause 31(7)(a) of the 1996 Act, would come with curiosity for a
interval from the date on which the reason for motion arose to the date
on which the award was made.

DECISION BY THE HON’BLE COURT:

IN RESPECT OF INTEREST TO BE AWARDED:

Whereas deliberating on the problem at hand, the Hon’ble Court docket
distinguished its earlier judgment titled Hyder Consulting (UK)
Restricted
1 Vs Governor, State of Orissa (Hyder
Consulting),
whereby it was held that the sum awarded could
embody the principal quantity and such curiosity because the Arbitral
tribunal deems match. The mentioned judgment additional held that, if no
curiosity is awarded, then the “sum” includes solely the
principal quantity and also will embody the curiosity quantity
pendente lite. Nonetheless, within the current case Hon’ble
Court docket was of the view that the availability and the half which offers
with the ability of the Arbitral Tribunal to award curiosity would
function provided that it isn’t “in any other case agreed by the
events
“, as prescribed in Part 31(7)(a) of the 1996
Act. If there may be an settlement between the events on the contrary,
then the Arbitral Tribunal would lose its discretion to award
curiosity and should be guided by the settlement between the
events.

Due to this fact, the courtroom noticed that the legislative intent of
Part 31(7)(a) of the 1996 Act is sort of clear that the discretion
relating to the grant of curiosity could be accessible to the Arbitral
Tribunal solely when there isn’t a settlement on the contrary between
the events, and the Arbitral tribunal would stop to have any
discretion with regard to the facets talked about within the mentioned
contractual provision.

IN RESPECT OF JUDICIAL INTERPRETATION OF “UNLESS OTHERWISE
AGREED BY THE PARTIES”:

The hon’ble courtroom referred to the judgment of “NS
NAYAK & Sons Vs State of Goa
2” and famous
the interpretation of the expression “except in any other case
agreed by the events
“, whereby the Court docket had held that
the time period “except in any other case agreed by the
events
” signifies that it’s open to the events to
agree in any other case. It’s the fundamental scheme and an necessary facet of
the Arbitration Act, of 1996 that the Act emphasizes ‘occasion
autonomy’ and that in the course of the arbitral proceedings, the best
is given to the events to determine their very own process.

Hon’ble Court docket whereas referring to the judicial interpretation
of the statute as per the judgment titled “Hardeep Singh
Vs State of Punjab and others
3“, held that
whereas construing a provision, the total impact is to be given to the
language used therein, giving reference to the context and different
provisions of the statute. Court docket additional held that an
interpretation that renders a provision otiose or redundant ought to
be prevented and no a part of a statute and no phrase of a statute may be
construed in isolation.

Along with the above, whereas deliberating on the problem, of
“find out how to interpret a normal judgment”, the Hon’ble
Court docket noticed that the ‘ratio decidendi’ is the rule
deducible from the applying of legislation to the information and
circumstances of a case which constitutes its ratio decidendi, and
not some conclusion primarily based upon information which can seem like
related. Additional, the courtroom held that one extra or completely different
truth could make a world of distinction between conclusions in two
circumstances even when the identical ideas are utilized in every case of
related information.

CONCLUSION:

Hon’ble Court docket, whereas distinguishing Hyder
Consultancy,
held that there was no settlement between the
events in that case, with regard to the fee of curiosity and as
such, the phrase “except in any other case agreed by the
events
” didn’t fall for consideration within the Hyder
Consultancy case. Nonetheless, on the contrary within the current judgment,
Hon’ble Court docket held that the legislative intent is obvious when
the events have agreed on the contrary on any of the facets as
talked about in Part 31(7)(a) of the 1996 Act, the Arbitral
Tribunal will stop to have any discretion and could be certain by an
settlement between the events.

By counting on the above conclusion, the Court docket was happy to
dismiss the current enchantment whereas holding that Article 29.8 of the
Concession Settlement categorically supplied for the fee of
curiosity on the Termination Fee quantity. Due to this fact, the choice
of the Arbitral tribunal on granting curiosity previous to the date of
award and after the date of award was held to be in accordance with
the provisions of the Concession Settlement. The Arbitral Tribunal
had rightly given impact to the particular settlement between the
events. Hon’ble Court docket additional held that the arbitral award has
been handed in consonance with the provisions as contained in
Part 31(7)(a) of the 1996 Act and in consonance with the phrase
except in any other case agreed by the events” and
accordingly, the Arbitral Award stood confirmed.

Footnotes

1 (2015) 2 SCC 189

2 (2003) 6 SCC 56

3 (2014) 3 SCC 92

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