No grounds found for interference in the matter of an arbitral award: Delhi High Court

In a separate suit filed in the Delhi High Court, under the purview of Arbitration and Conciliation Act 1996, the judges opined that in the matters of arbitral awards, there should not interference of the court.

The above statement was opinionated in the case of Union of India & Anr. v. M/S Annavaram Concrete Pvt Ltd [FAO (OS) (COMM) 96/2020 & CM. APPL. 18980/2020] which was presided by a double judge bench, consisting of Justice Siddharth Mridul  and Justice Anup Jairam Bhambani on August 31st 2021.

The facts of the case are as follows. The Railway Board of India filed a petition with regards to challenging an arbitral award, in which the learned Sole Arbitrator had directed the Railways to refund to Annavaram the sum of Rs. 1,22,38,125/-, which had been deducted/withheld by the Railways as ‘liquidated damages’ imposed upon Annavaram for alleged breach of the terms and conditions of a tender. In the pursuance of above, a letter of acceptance was issued by the Indian Railway Board to Annavaram for supply of Pre-Stressed Concrete Sleepers.

The counsel on the behalf of the Railways submitted that Annavaram hasn’t met the part of the agreement by not supplying even a single sleeper. Many cases were referred during the arbitral proceedings but major emphasis was laid on the findings from PSA SICAL Terminals Pvt Ltd vs. Board of Trustees of V.O. Chidambranar [2021 SCC Online SC 508], Port Trust Tuticorin & Ors, MMTC Limited v. Vedanta Limited [(2019) 4 SCC 163], etc.

The sole arbitrator, upon hearing both the sides, held the award in the favour of Annavaram:

In view of the fact narrated above Rs. 1,22,38,125/- will be refunded to the claimant. The contract has to be closed as it where as basis (sic, as-is-where-is basis), so other claim of the claimant is also not to be considered. The above amount will be refunded to the claimant within three months of publication of the award.”

The above arbitral award was challenged in the Delhi High Court wherein the single judge bench also upheld the decision of the sole arbitrator. In a pursuance of the further challenge, the case moved to a division bench which also upheld the decision of the sole-arbitrator and held that “In view of the foregoing discussion, and being of the opinion that the view taken by the learned Sole Arbitrator, as upheld by the learned single Judge, is certainly a possible view based on facts in relation to the merits of the disputes, we find no ground to interfere in the arbitral award or the impugned judgment.” The court also held that “Annavaram shall be entitled to receive from the Railways the amount directed to be refunded in the arbitral award namely Rs. 1,22,38,125/- (Rupees One Crore Twenty-two Lacs, Thirty-eight Thousand, One Hundred and Twenty-five Only) along with simple interest at 6% per annum calculated from 08.05.2011 till the date of payment as per the impugned judgment, within 04 weeks of this judgment.”

Click here for the Judgment


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