Brief Facts:
A Concession Agreement was entered into between the appellant and the respondent. As per the Concession Agreement, the respondent DMRC was to carry out the civil works and the balance works were to be executed by the appellant DAMEPL. During the course of operations of the project, a dispute arose between the appellant DAMEPL and the respondent DMRC. The appellant DAMEPL terminated the Concession Agreement by Termination Notice. The respondent DMRC referred the dispute to Arbitration. Since the respondent DMRC was aggrieved by the Award, it filed a Petition under Section 34 of the 1996 Act in Delhi High Court, challenging the Arbitral Award. The learned Single Judge of the Delhi High Court upheld the Arbitral Award. The said judgment and order came to be challenged by the respondent DMRC before the Division Bench of the Delhi High Court. The said appeal was partly allowed by the Division Bench of the Delhi High Court. Being aggrieved thereby, the appellant DAMEPL preferred Civil Appeal. The said appeal came to be allowed. The appellant DAMEPL thereafter immediately filed an Execution Petition. Vide the impugned judgment and order, the learned Single Judge of the Delhi High Court issued certain directions with regard to the payment to be made by the respondent DMRC towards the satisfaction of the Award. Vide the impugned judgment and order, the application(s) for impleadment filed by the Canara Bank and the Union Bank of India came to be rejected.
Appellant’s Contention:
Learned counsel for the appellant submitted that the issue is no more res integra. Counsel relied upon the case of Hyder Consulting (UK) Limited vs. Governor, State of Orissa through Chief Engineer where it was held that, upon a plain reading of clauses (a) and (b) of subsection (7) of Section 31 of the 1996 Act, it is clear that in the sum for which an Award is made, interest may be included for the pre-award period, and that for the post-award period, interest up to the rate of 18% per annum may be awarded on such sum directed to be paid by the Arbitral Tribunal. It was submitted that the High Court has, therefore, erred in rejecting the claim of the appellant DAMEPL with regard to addition of the interest pendente lite in the sum to be arrived at under clause (a) of subsection (7) of Section 31 of the 1996 Act.
Respondent’s Contention:
Learned Counsel for the respondent submitted that the High Court has correctly rejected the claim of the appellant DAMEPL. It was submitted that clause (a) of subsection (7) of Section 31 of the 1996 Act itself begins with the phrase “unless otherwise agreed by the parties”. He submitted that there is a specific agreement between the parties under Article 29.8 of the Concession Agreement, with regard to payment of interest.
SC’s Observations:
After hearing both the sides SC stated that the part which deals with the power of the Arbitral Tribunal to award interest, would operate if it is not otherwise agreed by the parties. If there is an agreement between the parties to the contrary, the Arbitral Tribunal would lose its discretion to award interest and will have to be guided by the agreement between the parties.
SC further stated that the provision is clear that the Arbitral Tribunal is not bound to award interest. It has a discretion to award the interest or not to award. It further has a discretion to award interest at such rate as it deems reasonable. It further has a discretion to award interest on the whole or any part of the money.
SC stated that it can thus clearly be seen that every judgment must be read as applicable to the particular facts proved, or assumed to be proved. The generality of the expressions which are found in a judgment cannot be considered to be intended to be exposition of the whole law. They will have to be governed and qualified by the particular facts of the case in which such expressions are to be found.
SC Held:
After evaluating submissions made by both the parties the SC held that “in view of the specific agreement between the parties, the interest prior to the date of award so also after the date of award will be governed by Article 29.8 of the Concession Agreement, as has been directed by the Arbitral Tribunal. The findings recorded by the Arbitral Tribunal have reached finality in view of the judgment and order dated 9th September, 2021, passed by this Court in Civil Appeal. We therefore, see no error in the observations of the learned Single Judge of the Delhi High Court in paragraph 30 of the impugned judgment and order dated 10th March, 2022, passed in Execution Petition.”
Case Title: Delhi Airport Metro Express Private Limited v. Delhi Metro Rail Corporation
Bench: J. L. Nageswara Rao and J. B.R. Gavai
Citation: CIVIL APPEAL NO .3657 OF 2022
Decided on: 5th May, 2022
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