Arbitral award interference is limited absent jurisdictional error, patent illegality, or contract disregard; interest and computation were corrected.

A reasoned arbitral award will not be interfered with absent jurisdictional error, patent illegality, misconduct, or disregard of the contract; on the facts noted, the award was upheld in principle. A claim for interest under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 was rejected because no such claim was made before the arbitrator and the factual basis was absent. The monetary computation was corrected for improper adjustment of deposited sums and security deposit treatment, and the applicable interest rate was substituted with 9 per cent on the relevant sum.

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Issues: (i) Whether the arbitral award suffered from jurisdictional error, disregard of the contract terms, or patent illegality so as to justify interference; (ii) Whether the claim for interest could be governed by the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, and whether the award amount required correction in computation and interest.

Issue (i): Whether the arbitral award suffered from jurisdictional error, disregard of the contract terms, or patent illegality so as to justify interference

Analysis: The award was reasoned and detailed, with reference to the contractual clauses and the effect of the agreement. No material was shown to establish that the arbitrator ignored fundamental terms of the contract, acted beyond jurisdiction, or committed legal misconduct. The findings were neither perverse nor unreasonable, and the scope for interference with such an award was limited.

Conclusion: The award was not liable to be set aside on the ground of excess of jurisdiction, disregard of contract terms, or misconduct.

Issue (ii): Whether the claim for interest could be governed by the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, and whether the award amount required correction in computation and interest

Analysis: No claim under the 1993 Act had been made before the arbitrator, and the factual foundation necessary to apply that statute was absent. However, the computation of amounts receivable required correction because there was no basis for treating the deposited sum as withdrawn and the security deposit had been adjusted more than once. The higher rate of 15 per cent interest was not attracted on the facts found, and 9 per cent interest was the proper rate to apply on the relevant sum.

Conclusion: The plea based on the 1993 Act was rejected, but the monetary computation and interest were modified by making the proper adjustments and applying 9 per cent interest.

Final Conclusion: The award was upheld in principle and made the rule of the Court, but the amounts payable were corrected by necessary adjustments and by substituting the applicable rate of interest.

Ratio Decidendi: A reasoned arbitral award will not be interfered with unless it is shown to suffer from jurisdictional error, patent illegality, or disregard of the contract, and interest or monetary adjustments must rest on the pleadings, evidence, and the factual basis necessary to sustain them.

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