Court allows appeal for crane hire charges, sets interest rate at 10.5% p.a.

The court allowed the appeal, holding the appellant entitled to crane hire charges and no pre-Award interest, with post-Award interest payable at 10.5% p.a. from the date of the Award. The court set aside the Division Bench's decision on crane hire charges and interest, ordering the deduction of crane hire charges from the respondent's payable amount under the Award and specifying the interest payable by the appellant.

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Issues involved:
1. Interpretation of contract clauses regarding crane hire charges and interest in an arbitration dispute.

Analysis:
In this judgment, the appellant issued a notice inviting tender for engaging a sub-contractor to erect, test, and commission two 120 MW boilers. Disputes arose, leading to the constitution of an Arbitral Tribunal, which awarded amounts for various heads, including crane hire charges and interest. The appellant challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996. The Single Judge and the Division Bench of the High Court of Calcutta decided on the objections raised by the appellant regarding over-run charges, crane hire charges, and interest.

The appellant appealed against the Division Bench's decision, focusing on the crane hire charges and interest issues. The appellant argued that the Division Bench erred in reversing the Single Judge's decision on crane hire charges based on specific clauses in the Work Order and Agreement/Tender Document. The respondent defended the Division Bench's decision, stating that the Tribunal's award on crane hire charges was based on a holistic view of the evidence.

Regarding interest, the respondent tried to persuade the court to enhance the post-Award interest rate, but the court held that the Tribunal's decision on interest was final. The court also discussed the legal position on pre-Award interest based on previous judgments. The court held that no pre-Award interest should have been granted.

The court analyzed the relevant clauses of the Work Order and Tender Document to determine the entitlement to crane hire charges. It found that the appellant was entitled to the crane hire charges for Unit III as per the contract clauses, contrary to the Division Bench's decision. Therefore, the court allowed the appeal, holding the appellant entitled to crane hire charges and no pre-Award interest, with post-Award interest payable at 10.5% p.a. from the date of the Award.

In conclusion, the court set aside the Division Bench's decision on crane hire charges and interest, ordering the deduction of crane hire charges from the respondent's payable amount under the Award and specifying the interest payable by the appellant.

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