Supreme Court of India Judgements

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Arbitration

Arbitration Act, 1940 – Sections 19 and 16 (3) – Supersession of reference – Effect of application – Mere filing of an application cannot affect award already made before that date and filing the application.

Bysclaw

Apr 9, 2017

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Arbitration

Arbitration Act, 1940 — Sections 14 and 17 — Interest on interest for the post-award period — The case involves a contract from 1984-85 between petitioners and respondent with an arbitration award passed in 1997 — Whether the petitioner is entitled to compound interest or interest on interest for the post-award period — The petitioner argued that the 12% interest awarded for the pre-award period should be included in the principal sum for calculating the 15% post-award interest — The respondent contended that compound interest or interest on interest is not payable unless specifically granted by the award or court order — The Supreme Court dismissed the petition, upholding the lower courts’ decisions that only simple interest is payable — The court emphasized that neither the Arbitration Act nor the contract provided for compound interest or interest on interest — The court referred to various legal provisions and precedents, including Section 34 of the CPC and the Interest Act, 1978, which prohibit awarding interest on interest — The Special Leave Petition was dismissed.

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Arbitration

Arbitral Award — Contractual Dispute — The court held that the date of the arbitral award’s enforceability is the date when the objections against it are finally decided, and this date should be used to convert the award amount — If the award debtor deposits some amount before the court during the pendency of proceedings, the date of deposit should be used for conversion — The court further clarified that if the award holder is permitted to withdraw the deposited amount, even if it is conditional and subject to the final decision in the matter, the court must consider that the award holder could access and benefit from such deposit, and it is then the burden of the award holder to furnish security, as required by the court’s orders, to utilize the amount or to make an application for modification of the condition if it is unable to fulfill the same.

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Arbitration

Arbitration and Conciliation Act, 1996 — Where, under an appointment procedure agreed upon by the parties — Section 11(6) —The Supreme Court has clarified the scope of judicial scrutiny under Section 11(6) of the Act, 1996 — The court held that the court’s role in appointing an arbitrator is limited to examining the existence of an arbitration agreement and not to delve into the merits of the dispute or the validity of the agreement — The court further clarified that the issue of whether a claim is time-barred or not should be left to the arbitrator to decide, and the court should not conduct an intricate enquiry into the same — The court’s role is to ensure that the parties’ intention to resolve disputes through arbitration is upheld, and the legislative intention of minimum judicial interference in arbitral proceedings is given full effect — The court’s decision aims to streamline the position of law and avoid conflicts between different decisions in the future.

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Penal Code, 1860 (IPC) — Sections 420 and 34 — Nature of Offence —The Court’s decision to grant bail in a case involving Sections 420 and 34 IPC indicates that while these sections pertain to serious offenses (cheating and criminal conspiracy, respectively), bail may still be granted if the circumstances of the case, such as the nature of the transaction and the relationship between the parties, warrant it.

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