Case Law Details
Larsen Air Conditioning And Refrigration Company Vs Union of India & Ors. (Supreme Court of India)
Supreme Court held that the court is powerless to modify award and can only set aside partially, or wholly, an award. Accordingly, High Court has no reason to interfere with the arbitrator’s finding on interest accrued and payable.
Facts- Aggrieved by the impugned judgment of the Allahabad High Court, the appellant, M/s. Larsen Air Conditioning and Refrigeration Company, has approached the Supreme Court with the question of law, as to whether the High Court erred in modifying the arbitral award to the extent of reducing the interest, from compound interest of 18% to 9% simple interest per annum.
Notably, the dispute between the appellant and Union of India (respondent-state) arose from a contract entered into pursuant to being awarded the tender. In the course of work, certain disputes arose. The respondent-state referred the dispute to arbitration. The tribunal published its award and directing the first four respondents to pay 18% pendente lite and future compound interest on the award.
The respondent-state challenged the award u/s. 34 of the Arbitration and Conciliation Act, 1996. The district court, dismissed the challenge. Aggrieved, the respondent-state, preferred an appeal before the High Court. The High Court proceeded to reduce the rate of interest from 18% (as ordered by the arbitrator), to 9% per annum.
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