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Issues: (i) Whether the arbitral award allowing the supplier's claim could be interfered with; (ii) Whether the dismissal of the purchaser's counter-claim warranted remand under Section 30 of the Arbitration Act, 1940; (iii) Whether the arbitrator had power to award interest at 18% per annum for the pre-reference, pendente lite and post-award periods and whether the rate could be reduced.
Issue (i): Whether the arbitral award allowing the supplier's claim could be interfered with
Analysis: The contractual dispute turned on supply of oxygen under agreed quality and quantity terms. The arbitrator found that the supplier had supplied oxygen, that the purchaser had accepted the supply, and that the purchaser had not established a legally sustainable basis to deny payment. The High Court's interference was limited by the narrow grounds available under Section 30 of the Arbitration Act, 1940, and the award could not be disturbed merely because another view on the evidence was possible.
Conclusion: The award allowing the supplier's claim was upheld and no interference was warranted.
Issue (ii): Whether the dismissal of the purchaser's counter-claim warranted remand under Section 30 of the Arbitration Act, 1940
Analysis: The governing rule is that a court exercising jurisdiction under Section 30 cannot act as an appellate forum or reappreciate evidence. The arbitrator had considered the correspondence and material on record and held that the contractual risk-purchase mechanism was not invoked and that the purchaser had not proved the factual basis for its counter-claim. The High Court's remand rested on a fresh evaluation of the evidence rather than on any established ground of misconduct, improper procurement, or invalidity within Section 30.
Conclusion: The remand of the counter-claim was unjustified and the dismissal of the counter-claim by the arbitrator stood restored.
Issue (iii): Whether the arbitrator had power to award interest at 18% per annum for the pre-reference, pendente lite and post-award periods and whether the rate could be reduced
Analysis: Where the arbitration agreement is silent, an arbitrator may award interest for the pre-reference period, the pendente lite period and the post-award period, provided the rate is reasonable and there is no contractual prohibition. Section 34 of the Code of Civil Procedure, 1908 does not directly govern arbitral proceedings, but the arbitrator's power to grant interest is supported by established arbitral principles. On the facts, the rate of 18% was justified by the commercial arrangement between the parties, including the rate at which advances had been made.
Conclusion: The arbitrator had the power to award interest at 18% per annum and the reduction to 6% was not justified.
Final Conclusion: The award was substantially restored, the supplier's claim remained allowed, the counter-claim remained dismissed, and the original interest award was reinstated.
Ratio Decidendi: In exercising jurisdiction under Section 30 of the Arbitration Act, 1940, a court cannot reappreciate evidence or substitute its own view for that of the arbitrator unless the award is shown to suffer from misconduct, excess of jurisdiction, improper procurement, or other statutory invalidity; an arbitrator may also award reasonable interest where the contract does not prohibit it.
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