Case Law Details
PBSAMP Projects Pvt. Ltd. Vs HLV Limited Formerly Hotel Leela Venture Pvt. Ltd. (Telangana High Court)
PBSAMP Projects Pvt. Ltd. brought a civil revision petition before the Telangana High Court, challenging the order dated November 2, 2023, passed by the Principal Special Court in Hyderabad. The order in question dismissed PBSAMP’s petition seeking enforcement of an arbitral award dated September 8, 2019, against HLV Limited, formerly known as Hotel Leela Venture Pvt. Ltd. The crux of the matter revolved around the computation of the amount due to PBSAMP under the arbitral award.
The dispute stemmed from a Memorandum of Understanding (MoU) signed between the parties on April 9, 2014, wherein PBSAMP advanced a sum of Rs. 15.5 crores to HLV Limited. However, the MoU was terminated on October 9, 2014, leading to arbitration proceedings. The arbitral tribunal, in its award, directed HLV Limited to pay PBSAMP Rs. 15.5 crores along with interest at a rate of 21% per annum. Despite HLV Limited’s challenge under Section 34 of the Arbitration and Conciliation Act, 1996, the award was upheld, attaining finality.
PBSAMP subsequently filed an application seeking enforcement of the arbitral award under Order XXI Rule 54 and Rule 64 of the Code of Civil Procedure, 1908. However, the executing court dismissed the petition, contending that PBSAMP was not entitled to compound interest and that the amount paid by HLV Limited (Rs. 44,42,05,254.00) was in full satisfaction of the award.
The High Court, upon hearing arguments from both parties, examined the relevant provisions of the Arbitration and Conciliation Act, particularly Section 31(7)(a) and (b). Section 31(7)(a) empowers the arbitral tribunal to include interest in the sum for which the award is made, while Section 31(7)(b) specifies the rate of interest applicable from the date of the award to the date of payment.
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