Case Note & Summary
The dispute arose from an arbitration award made on 6.7.1991, where the arbitrator allowed certain claims of the respondent while disallowing others. The arbitrator granted interest at 18% per annum for specific periods. The Civil Court, in its judgment dated 19.2.2001, set aside parts of the award and modified the interest awarded, limiting it to claims 1 to 4 and 7. Both parties appealed the Civil Court's decision. The High Court, in its order dated 30.12.2009, dismissed the appellant's appeal while partially allowing the respondent's appeal, entitling the respondent to interest from the date of reference to the date of the award at 18% per annum. The Supreme Court, upon hearing the appeals, noted that the award was governed by the Arbitration Act, 1940, and referred to a precedent regarding interest rates. The court ultimately reduced the interest rate from 18% to 9% per annum while upholding the Civil Court's judgment as modified by the High Court in all other respects. The decision was delivered on 27.09.2010.
Headnote
A) Arbitration - Interest Rate - Modification of Interest Award - Arbitration Act, 1940 - The court modified the interest awarded by the arbitrator from 18% to 9% per annum, citing the absence of a specific contract regarding the rate of interest. The court upheld the Civil Court's judgment as modified by the High Court in all other respects. Held that the interest should not normally exceed 9% per annum in such cases (Paras 3-4).
Issue of Consideration
Whether the interest awarded by the arbitrator should be upheld or modified.
Final Decision
The Supreme Court allowed the appeals in part, reducing the interest awarded from 18% to 9% per annum while upholding the Civil Court's judgment as modified by the High Court in all other respects.
Law Points
- Arbitration
- Interest Rate
- Pendente Lite Interest
- Modification of Award
