Supreme Court Upholds Arbitrator's Award, Restores Dismissal of Counterclaim, and 18% Interest Rate Authority.

The SC upheld the Arbitrator's award favoring BOL, dismissing HCL's appeal. It restored the dismissal of HCL's counterclaim, finding the HC's re-evaluation beyond its jurisdiction under Section 30 of the Arbitration Act. The SC also reinstated the 18% interest rate, affirming the Arbitrator's authority to award it.

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Issues Involved:
1. Validity of the Arbitrator's award in favor of BOL.
2. Misconduct by the Arbitrator in dismissing HCL's counterclaim.
3. Arbitrator's power to award interest and the appropriate rate of interest.

Detailed Analysis:

1. Validity of the Arbitrator's award in favor of BOL:
The Arbitrator found that BOL had set up its oxygen plant and supplied oxygen to HCL, but HCL did not make payments, alleging that the oxygen did not meet the purity standards. The Arbitrator noted that HCL did not insist on the establishment of a Vacuum Insulated Storage Tank (VIST) and continued to accept the oxygen supply without terminating the contract for breach. The Arbitrator concluded that HCL had waived its rights to object and was therefore liable to make payments to BOL. Both the learned single Judge and the Division Bench upheld this finding, and the Supreme Court found no reason to interfere, thus dismissing HCL's appeal on this issue.

2. Misconduct by the Arbitrator in dismissing HCL's counterclaim:
The Arbitrator dismissed HCL's counterclaim, noting that HCL did not invoke Clause 10.4 (risk purchase) and did not prove that it had purchased oxygen from other sources. The learned single Judge and the Division Bench re-appreciated the evidence and found that the Arbitrator had not considered relevant letters and communications, leading to a finding of misconduct. However, the Supreme Court held that the High Court's re-appreciation of evidence was beyond its jurisdiction under Section 30 of the Arbitration Act, which limits grounds for setting aside an award to misconduct, procedural invalidity, or improper procurement. The Supreme Court restored the Arbitrator's dismissal of HCL's counterclaim.

3. Arbitrator's power to award interest and the appropriate rate of interest:
The Arbitrator awarded interest at 18% per annum for pre-reference, pendente lite, and post-award periods, noting that HCL had given advances to BOL at that rate. The learned single Judge and the Division Bench reduced the interest rate to 6%, citing the absence of a contractual provision for interest and relying on Section 34 of the Code of Civil Procedure. The Supreme Court, however, upheld the Arbitrator's decision, noting that an Arbitrator has the power to award interest if reasonable and that the 18% rate was justified given the advance rate. The Supreme Court thus restored the original interest award.

Conclusion:
The Supreme Court allowed BOL's appeals, restoring the Arbitrator's award in full, including the dismissal of HCL's counterclaim and the 18% interest rate. HCL's appeal was dismissed.

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