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Issues: (i) Whether the arbitral award could be sustained insofar as it allowed compensation and interest on the basis of chartered accountant certificates that were not proved by supporting evidence. (ii) Whether the remaining components of the award, including the claim for interest on delayed payment and arbitration costs, called for interference in appeal under Section 37.
Issue (i): Whether the arbitral award could be sustained insofar as it allowed compensation and interest on the basis of chartered accountant certificates that were not proved by supporting evidence.
Analysis: The claim for idling compensation was founded on certificates that only referred to audited books, contract ledgers and related documents, but the authors of the underlying material were not examined and no meaningful supporting proof of the figures was produced. The certificates were accepted by the arbitral tribunal without examining their foundation, rendering the basis of the award unsupported by evidence. An award resting on such material is vulnerable as being perverse and contrary to public policy when the claimed amounts are allowed without proof of the underlying facts.
Conclusion: This issue was decided in favour of the appellant. The compensation awarded on the basis of the chartered accountant certificates and the consequential interest on that component were disallowed.
Issue (ii): Whether the remaining components of the award, including the claim for interest on delayed payment and arbitration costs, called for interference in appeal under Section 37.
Analysis: The challenge to the separate claim for interest on profit and loss on delayed payment did not persuade the Court to interfere, and the arbitration costs were also found to be unexceptionable in appellate review. The Court therefore confined interference to the award components that depended on the unproved certificates and declined to disturb the rest.
Conclusion: This issue was decided against the appellant. The remaining portions of the award were left undisturbed.
Final Conclusion: The appeal succeeded only to the extent of removing the award components founded on unproved chartered accountant certificates, while the balance of the award was maintained.
Ratio Decidendi: An arbitral award that allows a claim on the basis of unproved certificates, without reliable evidence of the underlying figures and documents, is perverse and liable to be interfered with as being unsupported by evidence.
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