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TMI Blog2017 (10) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... d by issuance of Letter of Acceptance dated 17.6.1991. In this connection, an agreement was entered into between the appellant and the respondent on 22.8.1991. In the said agreement, General Conditions of the Contract (for short 'GCC') were incorporated and the parties were bound by the terms and conditions thereof. 5. Various disputes and differences arose between the parties regarding execution of work and its purported abandonment. The respondent issued notice dated 24.10.1991, seeking termination of the agreement. Another notice dated 15.11.1991 was issued to the appellant under Clause 62(1) of the GCC for rescission of the contract. However, at the request of the appellant through letter dated 2.4.1992, the validity of the contract was extended till 30.6.1992. The respondent further granted extension of time to complete the work upto July 1993. According to the appellant, the delay and/or hindrances occurred due to breaches committed by the Railway Administration. The remaining work was abandoned by the appellant w.e.f. 3.11.2003. 6. The appellant raised the claim before the respondent by his letter dated 30.10.1996. By a subsequent letter dated 22.6.1998, the appellant dema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditional Solicitor General appearing for the respondent submits that having regard to the 'No Claims Certificate' issued by the appellant, the appellant has no right to make any claim except for security deposit of Rs. 15,000/- from the respondent. There was no arbitral dispute between the parties. Therefore, the claim itself was not maintainable. It is further argued that, at any rate, the appellant was not entitled for any interest having regard to the terms of the contract. He prays for dismissal of the appeals. 10. Having regard to the contentions urged, the first question for our consideration is whether the Division Bench was justified in considering the arbitrability of the dispute for the first time in the appeal. It is evident from the materials on record that the dispute had arisen between the parties in relation to the contract in question. Therefore, the appellant filed an application before the Chief Justice of the High Court of Calcutta under Section 11(6) of the 1996 Act, for appointment of an Arbitrator in terms of the contract which was allowed and an Arbitral Tribunal was constituted for adjudication of the dispute. The Arbitrator after giving the parties opportu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs or soon after initiation thereof. The jurisdictional question is required to be determined as a preliminary ground. A decision taken thereupon by the arbitrator would be the subject-matter of challenge under Section 34 of the Act. In the event the arbitrator opined that he had no jurisdiction in relation thereto an appeal thereagainst was provided for under Section 37 of the Act." 13. It is also necessary to observe that intervention of the court is envisaged only in few circumstances like fraud or bias by the Arbitrators, violation of natural justice. The court cannot correct the errors of the Arbitrators. That is evident from para 52 of the judgment in Mcdermott International Inc (supra), which is as under: "52. The 1996 Act makes provision for the supervisory role of courts, for the review of the arbitral award only to ensure fairness. Intervention of the court is envisaged in few circumstances only, like, in case of fraud or bias by the arbitrators, violation of natural justice, etc. The court cannot correct errors of the arbitrators. It can only quash the award leaving the parties free to begin the arbitration again if it is desired. So, the scheme of the provision aim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rator was justified in awarding the pendente lite interest. However, it is not clear from M/s. Ambica Construction (supra) as to whether it was decided under The Arbitration Act, 1940 (for short 'the 1940 Act') or under the 1996 Act. It has relied on a judgment of Constitution Bench in Secretary, Irrigation Department, Government of Orissa and Others. vs. G.C. Roy (1992) 1 SCC 508. This judgment was with reference to the 1940 Act. In the 1940 Act, there was no provision which prohibited the Arbitrator from awarding interest for the pre-reference, pendente lite or post award period, whereas the 1996 Act contains a specific provision which says that if the agreement prohibits award of interest for the pre-award period, the Arbitrator cannot award interest for the said period. Therefore, the decision in M/s. Ambica Construction (supra) cannot be made applicable to the instant case. 18. Learned Additional Solicitor General appearing for the respondent submits that the position of law for cases covered under the 1996 Act, i.e. if agreement prohibits award of interest then the grant of pre-award interest is impermissible for the Arbitrator, has been reiterated by this Court in various j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d agreed to the fact that interest would not be awarded on the amount payable to the contractor under the contract, in our opinion, they were bound by their understanding. Having once agreed that the contractor would not claim any interest on the amount to be paid under the contract, he could not have claimed interest either before a civil court or before an Arbitral Tribunal." Therefore, it is clear that the appellant is not entitled for any interest on the amount awarded by the Arbitral Tribunal. 22. The Arbitral Tribunal had determined the amount payable to the appellant in a sum of Rs. 11,13,136/- and interest of Rs. 12,44,546/-. A sum of Rs. 38,82,150/- was deposited by the respondent which includes the award amount, interest for the pre-reference period, pendente lite and post-award interest. We have held that the appellant is not entitled for any interest. The appellant has already withdrawn 50% of the amount deposited by the respondent, which is in excess of the award amount exclusive of interest. Having regard to the facts and circumstances of the case, we deem it proper to direct the respondent not to recover the excess amount withdrawn by the appellant. Ordered accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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