The equality in rate of interest, would be in consonance with one of the objectives of the Arbitration and Conciliation Act, 1996, namely, finality of arbitration awards. This honorable judgement was passed by High Court of New Delhi in the case of Guru Gobind Singh Indraprastha University v. Engineering India Ltd [FAO(OS) (COMM) 46/2021 & CM APPLs.10323-10325/2021 AND 10760/2021] by The Hon’ble justice Asha Menon and Hon’ble Justice Man Mohan.
The appeal had been filed challenging the order that instead of granting a similar rate of interest @ 12% per FAO(OS) (COMM) 46/2021 Page 2 of 6 annum, had asked it to re-agitate the matter as per law despite appreciating that both the parties were to be treated on the same footing and pointed out that Section 34 of the Arbitration and Conciliation Act, 1996 allowed this Court to correct the Award at least to the extent of directing that same rate of interest shall be granted to both the parties and the amount of interest of Rs. 74.12 lakhs had been disallowed, and both the parties should have been permitted to re-agitate the matter before a freshly appointed arbitral tribunal. there is a calculation error in computing the external development charges by the Arbitrator inasmuch as the factum of the claimant completing only 41.9% work was not taken into account.
The learned council referred the case of State of Goa vs. Praveen Enterprises, AIR 2011 SC 3814 and the case of M/s. L.G. Electronics India (P) Ltd v. Dinesh Kalra.
The Court opinioned that, “in the present appeal, cannot examine the contention of the appellant qua any calculation error in computing the external development charges on the basis that the factum of the claimant completing only 41.9% work was not taken into account by the Arbitrator. if the matter is remanded to an arbitrator for fresh adjudication with regard to rate of interest, it would promote and not curtail litigation—an „end‟ which the Arbitration and Conciliation Act, 1996 seeks to discourage. In fact, this Court is of the opinion that if the argument of learned senior counsel for the appellant with regard to rate of interest is accepted, it would be in consonance with one of the objectives of the Arbitration and Conciliation Act, 1996, namely, finality of arbitration awards.”
The court disposed of the case stating that, “if the argument of learned senior counsel for the appellant with regard to rate of interest is accepted, it would promote one of the „cherished goals‟ of arbitration, namely, finality of arbitration awards. Accordingly, the impugned order is modified to the extent that the appellant shall also be entitled to the same rate of interest as awarded by the Arbitrator to the respondent on the counter-claim, namely, simple interest @ 12% per annum from 19th May, 2011 till the date of award and @ 16% from the date of the award to the date of payment.”
