In a recent judgment by the Delhi High Court, a challenge brought by the petitioner against an arbitral award in favor of the respondent was dismissed. The court maintained the interim award, which was based on admissions found in the Statement of Defence and replies to the Statement of Claim. The respondent, Original Name 1, successfully claimed a significant sum of Rs. 15,92,615.53/- that was previously deducted by the petitioner from running bills. Stay tuned for more insights on this legal development. #DelhiHighCourt #LegalUpdate #ArbitralAward
Facts
- The respondent claimed a further sum of Rs. 15,92,615.53/- for deductions made by the petitioner from running bills, but the learned Arbitrator declined this claim at the interim stage.
- The interim award was based on certain admissions found in the Statement of Defence (SoD) and the petitioner’s para-wise reply to the Statement of Claim.
- Admissions regarding the final bill amount for the electrical component and the escalation amount for the fire component were made by both parties in the SoD and the reply to the Statement of Claim.
- The interim award was granted for 2 out of the 5 amounts claimed by the respondent based on these admissions.
- The petition was initially filed before the learned District Judge, Patiala House Court in New Delhi but was returned to the petitioner.
- The FAC, Original Name 1, failed to fulfill the contractual obligations as specified in the agreement.
- Original Name 1 did not provide the necessary documentation and details for the project implementation.
- The delay in fulfilling the contractual obligations led to a significant escalation in the total due amount.
- As a result, Original Name 1 is liable to pay the total due escalation amount of Rs.36,60,206/-.
Arguments
- The Respondent seeks to refer and rely upon the contents of the preliminary objections and submissions previously filed.
- The learned Arbitrator has opined that the sums stated in the Statement of Defence stand admitted as payable by the petitioner to the respondent.
- The petitioner’s argument is that the admissions in the Statement of Defence are not unequivocal, especially at the interim stage.
- The petitioner contends that the learned Arbitrator should not have rendered an interim award before fully adjudicating upon the disputes.
Analysis
- Principles of interference with arbitral awards under section 34 of the A&C Act are restricted and narrow.
- Court should refrain from interfering with the arbitrator’s interpretation unless it is perverse or unreasonable.
- Provision allows for quick resolution based on admissions without taking evidence.
- Court will not interfere with the interim award based on alternative interpretations of admissions.
- If the judgment is passed based on admission, a decree can be drawn without the need for a trial.
- Admissions under section 6 of the Code of Civil Procedure, 1908 can lead to a judgment on admissions.
- The Court has the discretion to make a judgment based on admissions of fact in the pleading or otherwise.
- The judgment can be made at any stage of the suit either by application of a party or on the Court’s own initiative.
- The decree drawn up should be in accordance with the judgment and bear the date of its pronouncement.
- The recent decision in Karan Kapoor vs Madhuri Kumar emphasizes the discretionary nature of the power to make judgments based on admissions.
- In the case of BHEL vs Zillion Infraprojects (P) Ltd., a Division Bench of the court held that section 31(6) of the Act does not restrict the power to pass an interim award on admission.
- Reference was made to the Gammon India Ltd. case, where it was emphasized that the powers under Section 31(6) of the Act should not be artificially restricted.
- The court highlighted that restricting the power to pass an interim award on admission would go against the objectives of the Act.
- The principles of the CPC were followed in the arbitral proceedings leading to the interim award in the present case.
- The court carefully considered the petition and impugned interim award.
- The limited scope of the court’s intervention under section 34 of the A&C Act was recognized.
- No grounds were found to interfere with the impugned interim award.
- The submissions made at the Bar were taken into account.
- The court concluded that there was no justification for overturning the interim award.
Decision
- The court finds no merit in the present petition
- The petition is dismissed in-limine
- Any pending applications are also disposed of
Case Title: NEW DELHI MUNICIPAL COUNCIL Vs. N.S. ASSOCIATES PVT.LTD. (2024:DHC:4688)
Case Number: O.M.P. (COMM)-258/2024
