TaxTMI 
TaxTMI 
TaxTMI 
2023 (8) TMI 985
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....lite and future compound interest on the award in respect of Claim Nos. 1-8. 3. The respondent-state challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter 'the Act'). The district court Judgment dated 06.03.2003 passed by the District Judge, Kanpur Nagar in Misc. Case No. 64/70 of 1999, dismissed the challenge on the ground that it could not sit in appeal over the award and since the respondent-state had failed to file any proof of the grounds alleged. Aggrieved, the respondent-state, preferred an appeal before the High Court in 2003. In the interim, the respondent-state deposited Rs.10,00,000 in the District Court, Kanpur on 06.06.2003 against Rs.1,82,878.11 due at the time. 4. Partly allowing the appeal, the High Court disapproved the reasoning in the award on Claim No. 6; it held that the sum of Rs.3 lakhs awarded towards compensation for loss caused due to non-issue of tender document and paralysing business could not have been granted. The High Court held that it could not be said that the proceedings (in the present case) were under the Arbitration Act, 1940, and therefore, the rate of interest granted should not be 18%. The High Cou....
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....ate of Orissa v. G.C. Roy [1991] Supp. 3 SCR 417 to argue that when the agreement between the parties does not prohibit grant of interest and where the party claims interest in the dispute referred to an arbitrator, then the arbitrator does have the power to award interest pendente lite. 8. Mr. Vikramjit Banerjee, Additional Solicitor General (ASG), appearing on behalf of the Respondent-state, argued that the impugned judgment had taken a holistic view of the matter, and rightfully reduced the interest from 18% compound interest to 9% simple interest, in addition to disallowing Claim No. 6 of Rs.3,00,000 awarded by the arbitrator for non-issuance of tender. The High Court, it was urged, had considered all the aspects of the Indian Contract Act, 1872 and the Arbitration and Conciliation Act, 1996 before deciding to reduce the interest to a more reasonable rate. 9. It was asserted that even the counsel for the appellants at the time, before the High Court, had agreed that the statutory rate of interest should be 1 or 2% higher or lower than the bank rate, which in the last decade has been about 7-8%. As a result, 18% compound rate of interest was completely unjustified, and warrant....
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....ch amount "shall" carry interest @ 18% p.a. from the date of award till the date of payment. Since the Arbitration Act, 1940 has been repealed by way of Section 85 of the 1996 Act, the Schedule to the Arbitration Act, including the State amendment, also stands repealed. The only exception is provided in sub-section (2)(a) of Section 85 where a proceeding which had commenced when the Arbitration Act of 1940 was in force and continued even after coming into force of the 1996 Act, and all parties thereto agreed for application of the old Act of 1940. Therefore, the provisions of Arbitration Act, 1940 including the State amendment, namely, para 7-A inserted by Section 24 of the U.P. Amendment Act will have no application to the proceedings commenced after coming into force of the 1996 Act. 12. In the instant case, though the agreement was earlier to the date of coming into force of the 1996 Act, the proceedings admittedly commenced on 27-10- 1999 and were conducted in accordance with the 1996 Act. If that be so, para 7-A inserted by Section 24 of the U.P. Amendment Act has no application to the case at hand. Since the rate of interest granted by the arbitrator is in accordance with ....
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....ute. 15. The limited and extremely circumscribed jurisdiction of the court under Section 34 of the Act, permits the court to interfere with an award, sans the grounds of patent illegality, i.e., that "illegality must go to the root of the matter and cannot be of a trivial nature"; and that the tribunal "must decide in accordance with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground" [ref: Associate Builders (supra)]. The other ground would be denial of natural justice. In appeal, Section 37 of the Act grants narrower scope to the appellate court to review the findings in an award, if it has been upheld, or substantially upheld under Section 34. It is important to notice that the old Act contained a provision "15. Power of court to modify award.-The court may by order modify or correct an award- (a) where it appears that a part of the award is upon a matter not referred to arbitration and such part can be separated from the other part and does not affect the decision on the matter referred; or (b) where the award is imperfect in form, or contains any obvious e....