M/S. Siemens Ltd. vs M/S. South India Cements Ltd
2009 Latest Caselaw 2841 Del

     *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

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March, 2001 the said application was withdrawn in light of the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

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).

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.

The 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.

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.

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.

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

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

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

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

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

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.

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

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.

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

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

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

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