Case Note & Summary
The dispute arose from arbitration proceedings between the Oil & Natural Gas Commission and M/s Mc Clelland Engineers S.A., resulting in an award dated February 29, 1988. The arbitrators directed the appellant to pay specific amounts as interest on delayed payments. The appellant challenged the award, arguing that the arbitrators improperly awarded interest on interest and that the claim for interest was barred by limitation. The court noted that while the arbitrators have the authority to grant interest, they cannot award interest on interest, as the claim itself was for interest. The court also addressed the limitation argument, stating that the appellant failed to provide sufficient details to support the claim that the arbitration was barred by limitation. Consequently, the court upheld the lower court's decision to dismiss the appeal against the decree passed in terms of the award, concluding that the claims were valid and not barred by limitation. The appeal was dismissed without costs.
Headnote
A) Arbitration Law - Powers of Arbitrators - Interest on Interest - Arbitrators cannot award interest on interest as the claim itself is for interest. - Arbitration Act, 1940, Section 29 - The court held that the arbitrators have the power to grant interest on the principal amount claimed but not on the interest awarded, thus rejecting the contention that interest upon interest could be granted (Paras 1-2). B) Limitation Law - Bar of Limitation - Claim for interest on delayed payments not barred by limitation. - Limitation Act, 1963 - The court found that the appellant's claim for interest was not sufficiently challenged on the grounds of limitation before the arbitrators, leading to the dismissal of the appeal (Paras 2).
Issue of Consideration
Whether the arbitrators could award interest on interest and whether the claim for interest was barred by limitation.
Final Decision
The Supreme Court dismissed the appeal, affirming the lower court's decision to uphold the arbitration award. The court ruled that the arbitrators could not award interest on interest and found the limitation argument insufficiently substantiated.
Law Points
- Arbitration proceedings
- Interest Act
- Limitation Act
- powers of arbitrators
- interest on delayed payments
