Summary
The Supreme Court dismissed the municipal corporation's challenge to execution of an arbitral award, holding that the arbitrator's clarification, issued about seven years after the award under court permission and after the corporation took part in the proceedings, fell within the words 'unless another period of time has been agreed upon by the parties' in Section 33(1) of the Arbitration and Conciliation Act, 1996, so the arbitrator was not functus officio. Under Section 31(7), as construed in Hyder Consulting, post-award interest at 18% runs on the principal plus pre-award interest.
Issues
- Whether the arbitrator had become functus officio and lacked jurisdiction to issue a clarification on interest years after the award, beyond the 30-day period in Section 33(1) of the 1996 Act.
- Whether, under Section 31(7) of the 1996 Act, post-award interest is payable on the principal amount alone or on the principal plus pre-award and pendente lite interest.
- Whether the appellant could challenge the High Court's consent order remitting only the computation, and re-agitate an issue raised in a miscellaneous application it had withdrawn before the Supreme Court without liberty.
Provisions considered
- Section 31(7)(a) and (b), Arbitration and Conciliation Act, 1996Clause (a) gives the tribunal discretion, subject to party agreement, to include pre-award interest in the 'sum' awarded; clause (b) makes that sum, whether or not it includes interest, carry interest at 18% from the date of award to payment unless the award directs otherwise. Absent a contractual term on interest, post-award interest runs on principal plus pre-award interest. (¶¶ 36, 36.1, 36.2, 36.3, 36.4, 37, 38, 39, 60)
- Section 33(1), (2) and (7), Arbitration and Conciliation Act, 1996The 30-day limit for correction or interpretation of an award is not inflexible and may be extended where another period is agreed by the parties; the limit concerns time, not subject-matter jurisdiction. A clarification sought with court permission beyond 30 days, in which the other party fully participated, falls within that expression. (¶¶ 45, 45.1, 45.2, 45.3, 59)
Held
- Section 31(7)(a) is discretionary: the tribunal may or may not grant pre-award interest, but if granted it becomes part of the 'sum' awarded; under Section 31(7)(b) that sum carries interest at 18% from the award to payment unless the award otherwise directs, the statutory rate being mandatory where the tribunal does not fix post-award interest. Parties may contract out of pre-award interest but not of post-award interest. (¶¶ 36.3, 36.4, 37, 38, 39)
- Following Hyder Consulting, which overruled S.L. Arora, and later decisions, the sum on which post-award interest runs comprises the principal together with pre-award and pendente lite interest; since the contract here did not govern interest, the awarded sum carried 18% interest from the award till payment. (¶¶ 41, 41.2, 41.3, 42, 43, 44, 60)
- Under Section 33(1) the 30-day period for correction or interpretation may be extended where another period is agreed upon by the parties. The arbitrator had jurisdiction over the subject matter, so the principle that an order without inherent jurisdiction is a nullity did not apply. Where the court permitted the award holder to seek clarification beyond 30 days and the award debtor fully participated in the clarification proceedings, the case falls within that expression and the arbitrator was not functus officio. (¶¶ 45.1, 45.2, 45.3, 48, 50, 59)
- The impugned High Court order, which with the parties' consent remitted only the computation of the amount payable to the executing court, was a consent order and could not be assailed by the appellant. (¶¶ 56, 57)
- The functus officio objection had been raised in a miscellaneous application before the Supreme Court that was withdrawn without leave to agitate it elsewhere, so the appellant could not raise it again. (¶ 58)
Result
Appeal dismissed; High Court's order remitting the computation of the amount payable to the executing court upheld; no order as to costs.