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Issues: (i) whether the arbitral award was liable to be set aside on the grounds that the question of arbitrability was not decided as a preliminary issue, the award was non-speaking or unintelligible, and the amount awarded was unreasonable; (ii) whether the grant of interest for the various periods was legally sustainable.
Issue (i): whether the arbitral award was liable to be set aside on the grounds that the question of arbitrability was not decided as a preliminary issue, the award was non-speaking or unintelligible, and the amount awarded was unreasonable.
Analysis: The parties had proceeded before the arbitrator on the basis that the claims would be examined claim-wise and on merits. The award, read with the surrounding proceedings and the preamble, showed that the arbitrator had considered arbitrability and had awarded only on matters treated as arbitrable. A court does not sit in appeal over an arbitral award, and an award can be interfered with only where there is no evidence supporting it or where it rests on an erroneous legal proposition. The award was not unintelligible merely because it was not a detailed speaking award, and the quantum awarded was not shown to be per se absurd or preposterous.
Conclusion: The challenge to the award on the grounds of want of a preliminary ruling on arbitrability, non-speaking character, and alleged unreasonableness failed.
Issue (ii): whether the grant of interest for the various periods was legally sustainable.
Analysis: The principal amount awarded was confirmed, but the grant of interest had to conform to the governing law on pre-reference, pendente lite, and post-award interest. Interest could be sustained for the pre-reference period permissible under the Interest Act, 1978, while interest for the pendente lite period could not stand. Interest from the date of publication of the award to the date of decree was, however, allowable on the facts of the case under the court's powers in proceedings on the award. The interest component therefore required modification.
Conclusion: The award of interest was modified by deleting interest for the pendente lite period and confining interest to the amounts and periods upheld by the Court.
Final Conclusion: The award was substantially sustained, but the interest component was corrected; the appeals were disposed of by granting only partial relief.
Ratio Decidendi: An arbitral award will not be interfered with merely because it is not a detailed speaking award, if the materials show that the arbitrator considered the relevant issues and the award is intelligible on a reasonable reading; interest must be allowed or disallowed in accordance with the governing law applicable to each period.
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