Delhi High Court
M/S. Siemens Ltd. vs M/S. South India Cements Ltd on 27 July, 2009
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
*IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(OS)1745A/1993
% Date of decision: 27th July,2009
M/S. SIEMENS LTD. ....... Petitioner
Through:- Mr. C.M. Oberoi with Ms. Surekha
Raman, Advocates.
Versus
M/S. SOUTH INDIA CEMENTS LTD. ....... Respondent
Through:- Mr. L.P. Dhir & Mr. Manoj Yadav,
Advocates.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. Whether reporters of Local papers may No
be allowed to see the judgment?
2. To be referred to the reporter or not? No
3. Whether the judgment should be reported
in the Digest? No
RAJIV SAHAI ENDLAW, J.
1. The suit was registered on a petition under Sections 14 & 17 of the Arbitration Act, 1940 for filing and making the arbitral award dated 30th June,1993 rule of the court. On the award being filed in this court and notice of filing thereof being given to the parties the respondent M/s South India Cements Ltd. filed IA No.8418/1994 under Sections 30 & 33 of the 1940 for setting aside of the award. The pleadings in the said application completed and the usual issues framed on 19th July, 1995. The petitioner, M/s Siemens Ltd. did not file any objections to the award and has during the hearing also supported the award. However, application being IA No.1300/2009 has been filed by the petitioner for award of interest at 18 % per annum from the date of the award and for the period during which the proceedings for making it a rule of the court have remained pending and till payment of the amount. The counsel for the respondent had on 3rd November,1995 informed the court that the CS(OS)1745A/1993 Page 1 of 19 respondent had been declared a sick company within the meaning of SICA, 1985 and had been referred to the BIFR. Subsequently, IA No.8788/2000 was filed by the respondent under Section 22 of SICA, 1985 for suspension of the present proceedings. However, on 27th March, 2001 the said application was withdrawn in light of the judgment of the Division Bench of this court in M/s Lloyd Insulations (India) Ltd. Vs. Cement Corporation of India Ltd. 90 (2001) DLT 1 (DB) with liberty to file a fresh application but neither any fresh application was filed nor any argument in this regard was raised at the time of hearing.
2. To complete the narration it may also be stated that the arbitrator who has rendered the award was appointed vide an order dated 15th April, 1991 of this court in suit No.387A/1989. The arbitrator so appointed was a technical rather than a legal person and it is also not disputed that he during the arbitration, on 2nd & 3rd July, 1992 carried out inspection of the cement plant of the respondent to inspect the works carried out by the petitioner therein and also directed the petitioner to carry out certain works.
3. The disputes arose between the parties out of a contract dated 1st May,1985/2nd August,1985 between the parties, containing a provision for arbitration. The respondent was setting up a cement plant at Malkhed, Karnataka and had vide contract aforesaid appointed the petitioner as Electrical Contractor for the said proposed cement plant, to do detailed designing and engineering and to supply certain electrical equipment and to erect and commission the same. The said contract in Clause 7.7 of General Conditions of Contract provided for arbitration to a sole arbitrator to be appointed by the parties with mutual consent and upon the parties being unable to mutually agree, to the sole arbitrator to be appointed by CS(OS)1745A/1993 Page 2 of 19 the Chairman & Managing Director of Engineers India Ltd. (EIL) who were appointed as the Engineer In-charge or Consulting Engineer by the respondent with respect to the proposed cement plant. There was no requirement in the said arbitration clause for the arbitrator to give a reasoned or speaking award. There was no such requirement in the Arbitration Act, 1940 also. However, the parties are ad-idem that they jointly requested the arbitrator on 11th April, 1992 to give a reasoned award. The list in this regard between the parties is only to the extent, whether the arbitrator was bound by the said request of the parties or not.
4. The arbitral award is for payment of a total sum of Rs.87,94,000/- by the respondent to the petitioner under the following heads:-
i. Rs 30 lacs towards the amount of two bank guarantees furnished by the petitioner to the respondent and which the arbitrator found to have been wrongly encashed by the respondent.
ii. Rs 20,25,000/- towards interest @ 18% p.a from the date after encashment of bank guarantee till 31st May 1993 being the end of the month proceeding the date of award on the aforesaid sum of Rs 30 Lacs.
iii. Rs 7,42,000/- towards balance amount payable by respondent to the petitioner for supplies made and work done.
iv. Rs 6,23,000/- towards interest @ 18% p.a. from the date of substantial completion of works by petitioner till 31st May 1993 supra on the amount mentioned in (iii). CS(OS)1745A/1993 Page 3 of 19 v. Rs 6,00,000/- towards value of material, tools, instruments of petitioner which the respondent had not permitted the petitioner to remove from the site. vi. Rs.5,04,000/- towards interest @ 18% p.a on amounts in
(iv) above, from date of substantial completion of work till 31st May 1993 supra.
vii. Rs 10 Lacs towards establishment costs or recompense or compensation or damages payable by the respondent to the petitioner for delays attributable to respondent. viii. Rs.3,00,000/- towards costs of arbitration .
5. The arbitrator did not award any future interest from the date of the award to the petitioner. The claims of the petitioner against the respondent were for more than the amount awarded. However, the petitioner having not preferred any objections to the award, there is no need to go into the same.
6. The respondent had made 14 claims before the arbitrator against the petitioner; the same are listed herein below together with the findings of the arbitrator thereon:-
a. Of Rs.2,29,896/- permitted to be revised to Rs.3,26,525/- for not removing the 23 check list points prepared by EIL.
The arbitrator held the petitioner to have substantially attended to the check list points as were within the scope of its work except the two relays, compensation of Rs.56,000/- with respect whereto was taken into consideration and deducted out of the claims of the petitioner against the respondent.
b. Of Rs.7,44,024/- permitted to be revised to Rs.9,47,297/- by way of damages due to supply of VOLTAMP Make Transformer instead of Bharat Bijlee Make and the unsuitability of the VOLTAMP Make Transformer.
CS(OS)1745A/1993 Page 4 of 19The arbitrator held that the petitioner could not blamed for the alleged unsuitable character of the transformer supplied, but awarded a sum of Rs.1,50,000/- to the respondent on account of the change in make of the transformer and gave adjustment of the same in calculating the amount due to the petitioner from the respondent.
c. Of Rs.11,42,476.25p revised to Rs.13,61,399.25p as expenditure and damages on rectification of defects and maintenance liability period.
The arbitrator held that the respondent had itself by its conduct, in or around September, 1989 given up the terms of the contract and further held that the petitioner had no duty to perform after September, 1989. Hence, the claim of the respondent was rejected.
d. Of Rs.2,12,52,393.39p by way of damages for non-
completion of the work of inter-locking system pertaining to local and control panels.
The arbitrator held the petitioner not responsible for refusing to do and/or not doing the modification work which was found to be in the nature of additional work and further held its scope was not clear. The arbitrator also held the claim to be remote. Hence, the said claim of the respondent was rejected.
e. Of Rs.4,70,228.58p on account of petitioner's failure/refusal to supply the post commission spares of the value of Rs.2,00,000/-.
The arbitrator awarded an amount of Rs.2,00,000/- to the respondent on this account and adjusted the same out of the monies found due to the petitioner from the respondent. The balance claimed under this head was rejected.
CS(OS)1745A/1993 Page 5 of 19 f. Of Rs.5,94,000/- for damages attributable to petitioner's failure to provide the Warranty Bank Guarantee in an amount of Rs.12 lacs.
The arbitrator held that since the respondent had failed to discharge and return to the petitioner the earlier two bank guarantees in the sum of Rs.30 lacs and which two bank guarantees were valid only up to the commissioning, the petitioner was justified in not providing the third bank guarantee for Rs.12 lacs which was for warranting the equipment. The said claim of the respondent was thus rejected.
g. Of Rs.2,60,32,713/- by way of damages for the petitioner abandoning the site in or about March, 1989.
The arbitrator found that the petitioner till about September, 1989 did look upon the contract with the respondent as valid and binding and did not leave the site in March, 1989. The arbitrator further held that after September, 1989 the petitioner was under no obligation to do anything. Hence, the claim of the respondent was rejected.
h. Of Rs.14,63,375.40p for mis-utilization of the mobilization advance.
The arbitrator held that the petitioner did not mis-utilize the advance and on the contrary tolerated the respondent's non-payments and delayed payments. He further found that when extensive changes and additions were introduced into the contract by the respondent and EIL the petitioner was not given any additional advance. Hence, the claim of the respondent was rejected. i. Of Rs.37,84,252.43p for over billing and breach of contract.
CS(OS)1745A/1993 Page 6 of 19 The arbitrator found that the petitioner had conceded an amount of Rs.13,50,189/- adjustment whereof was given by the arbitrator. The arbitrator found the respondent not entitled to any other amount and hence the claim for the balance amount was rejected.
j. Of Rs.48,607.10p which was conceded by the petitioner and was taken into account by the arbitrator while making the award in favour of the petitioner.
k. Of Rs.6 lacs by way of liquidated damages for delayed execution of the work.
The arbitrator found the respondent to have delayed the execution and therefore rejected the claim.
l. Of Rs.10,58,671.98p by way of damages for failure to put in the necessary work in-spite of receiving full payment including 15% retention money.
The arbitrator rejected the claim of the respondent that the retention money was not payable by the respondent to the petitioner and hence disallowed the claim. The arbitrator further held that the petitioner did it's best to perform the contract in-spite of several changes, qualitative and quantitative, made by respondent and EIL and in-spite of several and substantial non-payments and delayed payments and other defaults by the respondent.
m. Of Rs.9,91,450/- of costs of arbitration.
The arbitrator found the essential justice of the case with the petitioner and having found the respondent to have failed to carry out its contractual duties, responsibilities and liabilities held the respondent not entitled to costs of arbitration. Per contra, costs of Rs.3 lacs as aforesaid were awarded to the petitioner against the respondent. CS(OS)1745A/1993 Page 7 of 19 n. Of Rs.2,94,922/- on account of penal charges paid to Karnataka Electricity Board.
The arbitrator found the respondent itself to blame for the delay in the work of switchyard and further held that the petitioner is not in any way concerned with these penalty charges or minimum charges and hence dismissed the claim.
7. The respondent has in IA No.8418/1994 on the one hand pleaded that no reasoning has been given while deciding any of the claims or counter claims; that the award merely sets out the pleadings, oral evidence and the documents and after recording that the arbitrator had applied his mind to the evidence produced, without referring to any particular document, oral evidence or pleadings given the award, and on the other hand in other paragraphs it is pleaded that the doctrines/principles relied upon by the arbitrator had no application or limited application. Thus there is inherent contradiction in the pleadings at least qua the ground of award being unreasoned. In my opinion reading the objections of the respondent as a whole, the ground of the award being non-speaking or unreasoned is not made out.
8. In fact what the arbitrator has done in the award is, to after setting out the pleadings, documents and the evidence and the applications filed by the parties and before proceeding to discuss the claims and the counter claims of the parties, in paras A.1 to A.37 given his general findings. He has held that the respondent having appointed EIL as a Consulting Engineer for getting implemented the contract with the petitioner, EIL's say would have been significant on many important aspects of actual performance of the petitioner; he has further recorded that though EIL was requested to depute representative to be a witness in these proceedings but EIL did not CS(OS)1745A/1993 Page 8 of 19 depute any such representative as a witness. The arbitrator also found that the respondent was a new company having no manufacturing experience or experience of setting up manufacturing plant and that partly explained, according to the arbitrator, several mistakes and failures on the respondent's part in implementing the contract. The arbitrator further found that the respondent and EIL had made substantial changes and additions at different stage in quality/number and also on the specifications of the equipment to be supplied by the petitioner and which substantially contributed to delays in the petitioner's performance of the contract.
9. The arbitrator further found that the respondent and EIL delayed feeding of engineering inputs to the petitioner and found the same to be the main reason for delayed implementation of the petitioner's work. The arbitrator further found that the respondent had substantial financial difficulties and delayed repeatedly and on a substantial scale the payments for supply made and work done by the petitioner and which delays added to the total time taken. The arbitrator further held that the respondent did not give any importance to the dates stipulated in the agreement for completion and did not arrange for the basic engineering inputs, drawings, standard and specification necessary for the petitioner to perform its part of the agreement. The arbitrator further found that the respondent did not hold regular periodical coordination meetings of all the contractors engaged by it and which meetings were necessary for inter-connected and inter-dependent activities/tasks of each contractor as well as the respondent. It was also found that owing to differences between respondent and EIL, EIL had left the site and owing to the decision of the respondent, subsequent to contract with the petitioner, of having DG sets in addition to normal electric power CS(OS)1745A/1993 Page 9 of 19 supply, ancillary changes and modifications had to be introduced in the work of the petitioner and which radically changed the contract between the petitioner and the respondent; the said introduction of DG sets was also held to be a major cause for delay.
10. The arbitrator also found that the two bank guarantees furnished by the petitioner of Rs.30 lac were valid only up to commissioning of equipment supplied by petitioner and the said commissioning had been done in May, 1988/September, 1988 and in June, 1989 there was no justification for the respondent to encash the said guarantees. The arbitrator also found that the loss claimed by the respondent were indirect, remote, irrelevant, inconsequential or insignificant in nature and there was no warranty by the petitioner as to the quantity or quality of cement that would be produced in the plant of the respondent. The arbitrator also held that the respondent had not taken any prompt action with respect of the alleged breaches on the part of the petitioner and had not mitigated the losses or damages alleged.
11. The counsel for the respondent/objector has contended that the award does not comply with the request of the parties for a reasoned award and relied upon the dicta of the Division Bench of this court in College of Vocational Studies Vs. S.S. Jetli AIR 1987 Delhi 134. It is argued that the arbitrator has given his meandering thoughts which do not amount to reasoning as required by law. Attention in this regard is also invited to M/s Short Pile Construction Co. Vs. DDA 76 1998 DLT 189. In response to the contention of the counsel for the petitioner of the arbitrator being not bound by the request of the parties for a reasoned award reliance is placed on K.N. Damodharan Vs. State of Kerala (2000) 10 SCC 351 and on BSNL Vs. Subash Chandra Kanchan (2006) 8 CS(OS)1745A/1993 Page 10 of 19 SCC 279. The counsel for the respondent towards the end also cited Gora Lal Vs. Union of India (2003) 12 SCC 459 also laying down that where the agreement of the parties required the arbitrator to indicate his findings along with the sums awarded, separately on each individual item of the dispute and where the arbitrator did not record findings on each item, the same was held to be a ground for setting aside of the award. I may, however, notice that the Supreme Court in the said judgment made it clear that the same was confined to the facts of that case and to the interpretation of the clause of the agreement in that case. In the present case, I may reiterate that not only there was no requirement in the agreement for giving reasons but on 11th April, 1982 request is stated to have been made only for a reasoned award and not for a finding on each and every item. Thus the last of the said judgments which the Supreme Court confined to the facts of its own is not applicable.
12. Per contra, the counsel for the petitioner has contended that the arbitrator was not obliged to give a reasoned award. He has also argued that from a reading of the award in the present case it is manifest that it is the result of due consideration of all the evidence produced and the submissions made and contains the findings and observations as a result of perusal and study of the evidence and the site visit. It is controverted that the award is not reasoned. The counsel for the petitioner has also argued that a reasoned award amounted to a judgment of the court and merely because the award is not written in the language as a judgment, is no ground for averring that the same is unreasoned or non-speaking. The counsel for the petitioner relied upon India Oil Corporation. Vs. Indian Carbon Ltd. JT 1988 (2) SC 212 holding that it is one thing to say that reasons should be stated and another thing to state that a CS(OS)1745A/1993 Page 11 of 19 detailed judgment be given in support of the award; even if it be held that it is obligatory to state the reasons, it is not obligatory to give detailed reason. To the same effect is Gujarat Water Supply & Sewerage Board Vs. Unique Erectors (Gujarat) (P) Ltd. AIR 1989 SC 973 wherein the Supreme Court held that an award should be read reasonably as a whole to find out the implication and the meaning thereof - short intelligible indications of the grounds should be discernible to find out the mind of the arbitrator for his action; even if it be enjoined that reasons have to be stated - the said reasons should be intelligible and should deal expressly or impliedly with the substantial points that have been raised - sufficiency of reasons depends upon the facts and circumstances of the case and the court does not sit in appeal over the award and review of the reasons. The counsel for the petitioner also relied upon Chaudhary Construction Co. Vs. MCD 1995 34 DRJ 487 also laying down that the arbitrator is only required to indicate his mind set as to how he arrived at the decision in the award and sufficiency and quality of evidence is a matter for the arbitrator and the court is not permitted to reappraise the evidence and sit as a court of appeal over the arbitrator's award.
13. I am unable to accept the contention of the counsel for the petitioner that in-spite of the parties having requested the arbitrator to give a reasoned award, the arbitrator was not bound by the said request. The arbitrator is a creature of the contract between the parties and is bound by the same. Just like an arbitrator is bound to give a reasoned award when the arbitration agreement provides so, even where the parties reach an agreement for the award to be reasoned, after commencement of arbitration, the arbitrator would be bound by the said agreement. I do not see any differences in such CS(OS)1745A/1993 Page 12 of 19 agreement for the award being reasoned being reached prior to reference to arbitration or post such reference. The only option of the arbitrator, where the consensus for a reasoned award is reached post reference is to, if not desirous of proceeding with the arbitration and giving reasoned award is to recuse himself. The arbitrator in the present case having not done so, impliedly consented to give a reasoned award.
14. I am however unable to accept the contention of the counsel for the respondent of the award in the present case being non- speaking or unreasoned or of the award with respect to some of the claims only being reasoned and being unreasoned with respect to the others. In this regard, the judgment (supra) laying down that the requirement for reasons is to be viewed in the facts and circumstances of each case is apposite. The facts of the present case were inter-alia concerned with the delays in execution of the work and non-completion of the work by the petitioner and the claims against each other arising therefrom. The arbitrator before dealing with the individual claims and counter claims has in paras A.1 to A.37 returned general findings with reasons. In the facts of the case, the general findings with reasons govern the findings written subsequently by the arbitrator with respect to individual claims and counter claims. It is for this reason that the findings written with respect to individual claims are not lengthy and which has given occasion to the respondent to take the plea of the award being not reasoned as it was required to be. In view of the detailed reasons and findings in para A.1 to A.37, the reason for rejection or acceptance of individual claims and counter claims are implicit. Wherever required, the arbitrator has supplemented the same with other reasons.
CS(OS)1745A/1993 Page 13 of 19
15. Test whether reasons exist or not is not quantitative but qualitative. To justify the award as reasoned, the length thereof is not to be seen. There may be cases where in-spite of several pages having been devoted to each claim, award may still be held to be unreasoned or non-speaking. Conversely, reasons may be in the form of a single word or sentence. The courts are thus while dealing with such pleas not to be swayed merely because it is demonstrated that with respect to a particular claim no reason has been given, if from the contents of the other paragraphs or from a reading of the award as a whole, the reason for the arbitrator having reached the conclusion in a particular paragraph in which no reasons may have been stated is decipherable or is implied.
16. The arbitrator, as aforesaid was a technical and not a legal person. Such technical persons are not expected to be steeped in law and familiar with language as the lawyers and the courts are accustomed to. Axiomatically, the award of such an arbitrator cannot be expected to be in the form of a judgment of the court or pass the test of the form in which a judgment of the court, also required to be reasoned, is written.
17. I have in Jai Singh Vs. DDA 2008(3) ARBLR 667 (DELHI) and the Division Bench of this court in DDA Vs. Sunder Lal Khatri's Sons 157 (2009) DLT 555 dealt with the aspect of and defined "reason". Reason is a ground or motive for a belief or course of action, a statement in justification or explanation of belief or action. It is in the sense that the award must state reasons for the amount awarded. Reason is the link between the materials by which certain conclusions are based and the actual conclusions.
18. Though the respondent has in para 3 of the preliminary objections in IA No.8418/1994 contended that the arbitrator has CS(OS)1745A/1993 Page 14 of 19 given a finding only in respect of 6 claims out of the 14 claims raised before him and the award is silent/non-speaking in respect of rest of the claims, the respondent has not specified with respect to which of the claims the award is averred to be silent/non-speaking. The objections of the respondent thereafter in the paragraphs on merits are as to insufficiency of evidence for the findings of the arbitrator. The sufficiency or insufficiency of evidence before the arbitrator for reaching a particular finding is not within the domain of this court. The counsel for the petitioner has in this regard rightly relied upon M/s Sudarsan Trading Co. V. Govt. of Kerala AIR 1989 SC 890 laying down that appraisement of evidence by the arbitrator is never a matter which the court questions and considers and that the arbitrator is the sole judge of the quality as well as the quantity of evidence and it is not for the court to take upon itself the task of being a judge on the evidence before the arbitrator. Reliance was also placed on Indu Engineering & Textiles Ltd. Vs. DDA 2001 5 SCC 691 on the proposition that a plausible view taken by the arbitrator could not be said to be suffering from any manifest error on the face of the award or wholly improbable or perverse one and cannot be interfered with. The counsel for the petitioner also referred to UP State Electricity Board Vs. Searsole Chemicals Ltd. (2001) 3 SCC 397 to the effect that where the arbitrators have applied their minds to the pleadings the evidence adduced before them and the terms of the contract, there is no scope for reappraisal of the matter by the court as if it were an appeal and where two views are possible, the view taken by the arbitrator would prevail. The judgments of the Supreme Court in Smita Conductors Ltd. Vs. Euro Alloys Ltd. (2001) 7 SCC 328 and in Puri Construction Pvt. Ltd. Vs. Union of India AIR 1989 SC 777 were also cited in this regard.
CS(OS)1745A/1993 Page 15 of 19
19. The counsel for the respondent in support of his proposition relied on Rajasthan State Mines & Minerals Ltd. Vs. Eastern Engineering Enterprises (1999) 9 SCC 283 to the effect that the arbitrator is bound by the contract of the parties. On the basis of the said judgment error on the face of the award is averred with respect to the doctrine of substantial performance adopted by the arbitrator in contravention of the contract.
20. I am afraid the same is not the position. The arbitrator has not given go bye to the 23 defects which were pointed out by EIL to be rectified by the petitioner. What the arbitrator has held is that the same were complied and/or those which were not complied were either not required to be complied or which were required to be complied and not complied, the arbitrator has given adjustment with respect thereto. Thus, the findings by the arbitrator are findings of fact and plausible and are non-interfereable in this jurisdiction. The counsel for respondent further relied upon :-
(i) K.V. George Vs. Secretary to Government Water & Power Department, (1989) 4 SCC 595. In this case, the counter claims had not been considered. That is not the position here and thus the judgment is not applicable.
(ii) The respondent also referred to Food Corporation of India Vs. Chandu Construction (2007) 4 SCC 697 which is also a case of departure by the arbitrator from the contract and which has been held to be a misconduct. This judgment is also not applicable to the facts of the present case. The arbitrator in the present case has either held the contractual term to be complied or to have been varied with the consent of the parties. Neither of the said findings is interfereable under Sections 30 & 33, of the 1940 Act and no finding CS(OS)1745A/1993 Page 16 of 19 of the arbitrator is shown to be in the teeth of unambiguous terms of the agreement.
(iii) The respondent also referred to Bharat Coking Coal Ltd. Vs. Annapurna Construction (2003) 8 SCC 154. This is also a case of the arbitrator travelling beyond the contract and which has been held to be without jurisdiction. No case herein is made out of the arbitrator travelling beyond the terms of the contract.
(iv) Union of India Vs. Banwari Lal & Sons (P) Ltd. (2004) 5 SCC 304 defining misconduct as ignoring of material documents, evident from the face of the record and/or if the award is based on a erroneous proposition of law apparent from award itself. I find the same also to be not the case herein.
(v) Ramachandra Reddy & Co. Vs. State of Andhra Pradesh (2001) 4 SCC 241 holding an erroneous legal proposition made the basis of the award and such proposition being discernible from the award itself a ground for setting aside of the award. Objection in this regard is taken to the doctrine of anticipated breach and substantial performance referred by the arbitrator. I do not find that such doctrine even if in applicable, forms the sole basis of the award.
The award has generally recorded that the petitioner had completed the works for which its claims have been allowed. The award further records the findings with respect to the conduct of the parties and the resultant delays and thus holds the actions of the petitioner to be not in breach of the contract. In my opinion, even independently of the reference to the said doctrines, there are sufficient reasons in the award for the findings returned.
21. I have already dealt with the various contentions in the objections petition. The counsel for the respondent has tried to build his case only on the principles laid down by the Division Bench of CS(OS)1745A/1993 Page 17 of 19 this court in College of Vocational Studies (Supra). However, on perusal of the award in the present case, I do not find the same to be without reasons, considering the facts and circumstances of the case. This court while appointing the arbitrator considering that the matter involved some technical knowledge had not only appointed a technical person as arbitrator but also permitted the arbitrator to also take assistance of other technical persons in this regard. The arbitrator in the present case has given the award after visiting the site and inspecting the same. The counsel for the respondent contended that though the arbitrator who had rendered the award has died ten years ago but the case merits remand to another arbitrator for rehearing. No purpose will be served in remanding the matter in as much as the position at site may have changed drastically in the last 15 years. It would not be possible for any new arbitrator even if appointed to have the feel which the arbitrator whose award is challenged had the benefit of, by inspection at the contemporaneous time.
22. That leaves the prayer of the petitioner for award of interest. Though no objection has been taken by the petitioner to the award before this court but I find that in Amar Industries Vs. U.O.I. (2006) 2 Arb. LR 253 (Delhi) this court has taken a view that this court is empowered to award interest for the period, the proceeding for making the award a rule of the court remained pending before this court. The same view otherwise follows in law; under the 1940 Act the court had the inherent power to modify the award. In the present case, the objections have remained pending before this court for a long time of over 15 years. The value of the money awarded 15 years ago would have totally eroded today and even interest would not afford actual compensation. The buying power of the rupee has CS(OS)1745A/1993 Page 18 of 19 considerably come down in the last over 15 years. I thus award interest on the awarded amount at 10% per annum from the date of institution of the IA No.8418/1994 in the court and till the date of payment. The petitioner shall also be entitled to costs of these proceedings quantified at Rs.50,000/- from the respondent.
23. The award as modified aforesaid is thus made rule of the court and judgment in terms thereof passed. The petitioner shall also be entitled to interest @ 10% p.a. on the principal amount u/s. 29 of the 1940 Act, from the date of decree till payment.
Decree sheet be drawn up.
RAJIV SAHAI ENDLAW (JUDGE) July 27, 2009 PP CS(OS)1745A/1993 Page 19 of 19