Summary
The Railways sought to invoke a contractual no-interest clause against an arbitral award after consenting to reference of interest claims and not pursuing that defence at earlier stages. The Court rejected the belated plea as waived or abandoned and also relied on finality arising from failure to appeal the adverse part of the section34 decision.
Issues
- Whether the Railways could invoke the contractual interest exclusion at this stage after its earlier conduct.
- Whether failure to appeal the substantially adverse section34 order precluded renewed challenge.
Held
- The Railways consented to reference of interest issues, did not plead the clause before the tribunal, and did not press the ground in section34 argument or before the Division Bench. Although the ground appeared in the section34 application, its non-pursuit and earlier conduct established waiver or abandonment. (¶ 20–28)
- The unappealed part of the Single Judge’s order dismissing the Railways’ challenge to other claims attained finality. A regular appeal was necessary to keep those issues alive for any subsequent Supreme Court challenge. (¶ 29–31)
- An award of interest on arbitrable claims is not inherently illegal or contrary to public policy; section31(7) permits interest subject to the parties’ agreement. Interference requires a specified section34 ground. The decision did not adjudicate the belated clause defence on its substantive merits. (¶¶ 32–34, 37)
Result
Appeal dismissed; refusal to entertain the waived contractual plea left the Division Bench’s restoration of the full arbitral award undisturbed.