1997 (7) TMI 654 - HC - Indian Laws

Summary

Issues Involved:
The issues involved in this case are the application to make the arbitral award a rule of the court, objections raised by the respondents regarding misconduct of the arbitrator, and the claim for pendente lite interest by the petitioners.

Application to Make the Award Rule of the Court:
The petitioners moved an application under Section 14(2) read with Section 17 of the Arbitration Act to make the award of the Arbitrator, Mr. C. Achuthan, a rule of the Court. The respondents objected to the same, leading to a legal dispute.

Objections Raised by Respondents:
The respondents, represented by MS. MONA Aneja, argued that the Arbitrator had misconducted the proceedings by ignoring crucial facts. They contended that the Arbitrator had erred in rejecting the claim for payment based on specific clauses of the tender enquiry, alleging that the proceedings were not conducted fairly.

Arguments by Petitioners:
On the other hand, Ms. Purnima Bhat, representing the petitioners, argued that the Arbitrator had not committed any errors or misconduct during the proceedings. She emphasized that the Arbitrator had provided a well-reasoned finding and that the Court should not reverse it unless the award was manifestly perverse or illegal. The petitioners also sought pendente lite interest from the date of the award.

Arbitrator's Findings:
The Arbitrator, in the award, made specific findings regarding the nature of the claim and the validity of the compensation sought. It was noted that the respondents had levied compensation on sales tax, which was deemed invalid as per the contract terms. The Arbitrator highlighted that the claimants were not required to pay sales tax based on the documents submitted, and thus, the claim for compensation for delayed payment of sales tax was deemed unsustainable.

Court Decision:
After hearing the arguments, the Court dismissed the objections raised by the respondents. The petitioners' request for pendente lite interest was also rejected since no objection was filed regarding the same. The Court made the award a rule of the Court, allowing the petitioners to claim interest at the rate of 18% per annum if the respondents failed to make the payment within four months.

Conclusion:
In conclusion, the Court upheld the application to make the arbitral award a rule of the Court, dismissed the objections raised by the respondents, and provided clarity on the claim for pendente lite interest, ultimately ensuring the enforcement of the award in favor of the petitioners.