SC sorts out arbitration issues
The Supreme Court (SC) delivered three judgments in recent weeks deciding questions on arbitration matters. Last week, it set aside the judgment of the Calcutta High Court (HC) in the appeal case, Sri Chittranjan Maity vs Union of India. The contract for building a goods terminal in Howrah ran into legal controversy and the arbitral tribunal awarded a sum with interest to the contracting firm. The railway argued that the contractor had forfeited its claim by issuing a 'no claim certificate'. But that argument was not taken in the HC. Therefore, it was rejected. But, the apex court ruled that the firm was not entitled to interest on the awarded amount.
In the judgment, Srie Infrastructure Finance Ltd vs Tuff Drilling Ltd, the SC upheld the Calcutta HC judgment, and stated that an arbitral tribunal has the power to recall its order terminating the proceedings. In this case, Tuff Drilling did not file its claim before the tribunal for a long time, leading to the termination of arbitration itself. Later the firm came forward and filed the claim before the tribunal with reasons for the delay. It was rejected by the tribunal, which maintained that the proceedings had already closed. The HC rejected the tribunal's stand. The SC dismissed the appeal, pointing out that the tribunal had not examined the cause for delay and it would be in the interest of justice to examine it.
Yet another tricky question arose over the valuable right to appeal of a party and the issue was referred to a larger Bench, as the earlier SC judgments have differed on the answer. In this case, State of Jharkhand vs Hindustan Construction Co, the court had appointed an arbitrator and asked him to file the award before it. When he did so, the government wanted to challenge it in a civil court. The firm objected to it, asserting that since the SC was seized of the matter, only that court can hear the challenge to the award. The present judgment found that there were contrary rulings by the apex court and it required a final answer. The Chief Justice will set up the larger Bench of at least three judges.