Arbitral Award Upheld in Contract Interpretation Dispute, Interest Payment Validated

The Court upheld the arbitral award in a case where challenges were raised against the interpretation of contract provisions and interest payment timing. The Arbitral Tribunal's decisions on interpreting the contract clauses, including awarding compensation for customs duty and interest based on rupee devaluation, were found to be valid. Both parties' petitions were dismissed, affirming the arbitral award with a 15% per annum interest rate until final payment. The Court ruled in favor of the Tribunal's decisions, emphasizing adherence to the arbitration reference and contract terms.

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Issues:
Challenge to the arbitral award based on misconstruing contract provisions and interest payment before filing of claim.

Analysis:
1. The petitions challenged the arbitral award on two main grounds. Firstly, it was argued that the arbitrators misinterpreted clause 12A of the contract, leading to an award exceeding the contract term. Secondly, it was contended that interest should not have been granted for the period before the claim was filed. ONGC raised these challenges against the award.

2. ONGC's counsel argued that the Arbitral Tribunal overstepped its authority by awarding payment for devaluation of rupees, which was not covered under the contract clause. However, the Tribunal considered the original tender document and the agreement clause, concluding that the purpose was to allow for an increase in Rupee terms of customs duty. The Tribunal's decision to award the sum for larger customs duty payment by GTL was found to be within the scope of the contract clause, dismissing ONGC's contention.

3. Regarding the second contention on interest payment, ONGC claimed that interest should not have been awarded before the filing of the statement of claim. However, the Arbitral Tribunal justified the interest based on the devaluation of the rupee and GTL's payments. Considering the circumstances and the public nature of ONGC, the Tribunal's decision to award interest was upheld as justified, and no interference was warranted in this regard.

4. GTL also challenged the award, seeking compensation for increased payments in BGD rupee terms for rental and manday charges due to rupee devaluation. However, ONGC argued that these claims were not part of the arbitration reference. The Arbitrators concurred, stating that only disputes regarding customs duty were referred to arbitration, and they could only decide on pending disputes. The rejection of GTL's claim was deemed a valid interpretation of the agreement, with no misconduct or jurisdictional error found.

5. Ultimately, both petitions were dismissed, upholding the arbitral award. The award was decreed by the Court, with interest at 15% per annum until final payment. No costs were awarded in the case. The judgment affirmed the Arbitral Tribunal's decisions on the interpretation of the contract provisions and the award of interest, finding them to be within the scope of the arbitration reference and contract terms.

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