30 days time limit under Section 33 of Arbitration Act, 1996 for correction/ interpretation of arbitral award can be waived, if agreed upon by the parties and in that case, an arbitrator does not become functus officio | In the absence of agreement on interest, as per Sec. 31(7)(a), the sum awarded would mean the principal amount plus the interest awarded from the date of cause of action upto the date of the award, thereafter, as per Sec. 31(7)(b), the sum (principal plus interest) would carry interest @ 18% from the date of the award to the date of payment – North Delhi Municipal Corporation Vs. S.A. Builders Ltd. – Supreme Court
December 19, 2024
In this case, Hon’ble Supreme Court interpreted Section 31(7)(a) and Section 31(7)(b) and Section 33 of the Arbitration Act. The Hon’ble Court held that: (i) The clarification sought for and issued by Arbitrator would be covered by the expression unless another period of time has been agreed upon by the parties appearing in Section 33(1). (ii) In the circumstances, contention of the appellant that the Arbitrator had become functus officio and therefore lacked jurisdiction to issue the clarification cannot be accepted and is thus rejected. (iii) It is not the case of the appellant that the interest portion is covered by the contract agreement between the parties. In the absence thereof, Section 31(7)(a) as well as Section 31(7)(b) of the 1996 Act would have their full effect. The sum awarded would mean the principal amount plus the interest awarded from the date of cause of action upto the date of the award. Thereafter, as per Section 31(7)(b) of the 1996 Act, the sum (principal plus interest) would carry interest @ 18% from the date of the award to the date of payment. This would be consistent with the law laid down by this Court in Hyder Consulting (UK) Ltd. vs. Governor, State of Orissa (2017) ibclaw.in 248 SC.