Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Arbitration and Conciliation Act 1996 |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Act(s) Referred | Arbitration and Conciliation Act, 1996 (26 of 1996) |
Case(s) Referred | Referred Case 0 Referred Case 1 |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Disposed Off |
Headnote | Arbitration and Conciliation Act, 1996 – ss.34 and 37 –Appellant and the Respondent-Company entered into four interrelatedcontracts for construction of a Co-Generation Power Plant– Dispute arose between the parties – Respondent-Claimant invokedthe Arbitration clause and raised claims in multiple currencies i.e.Indian Rupee (INR), United States Dollar ($) and European Union(EUR) – Arbitral Tribunal awarded the amounts in favour of theClaimant in INR and EUR, but rejected the claim made in $ – ArbitralTribunal awarded interest on the amounts payable in INR and EURat the rate of 9% with a condition that if the awarded amounts werenot paid within 120 days, a higher rate of further interest @ 15%till the date of realization of the amount would be imposed – Proprietyof – Held: Not proper – The adoption of dual rate of interest inaward was not justified – The award of a much higher rate of interestafter 120 days was arbitrary, since the Award-debtor was entitledto challenge the award within a maximum period of 120 days’ asprovided by s.34(3) of the 1996 Act – If the award-debtor was madeliable to pay a higher rate of interest after 120 days, it wouldforeclose or seriously affect his statutory right to challenge theAward by filing objections u/s.34 of the said Act – Also, impositionof a high rate of interest @ 15% post-120 days was exorbitant,from an economic standpoint, and has no co-relation with theprevailing contemporary international rates of interest – Therefore,interest rate of 15% granted on the entire sum awarded not justified –Furthermore, a uniform rate of 9% interest for INR and EUR wasnot justified, as parties operated in different currency, it wasnecessary to take into account the complications caused bydifferential interest rates – Thus, a uniform rate of interest @ 9%would be applicable for the INR component in entirety till the dateof realization, however, interest payable on the EUR component of the Award would be as per LIBOR + 3 percentage points on thedate of award, till the date of realization.Banks/Banking – LIBOR – Held: LIBOR is an average interestrate calculated from time to time, based on inputs given by majorbanks in London as to their interest rates – Under the LIBOR regime,banks give details vis-a-vis actual interest rate that they are paying,or would be required to pay for borrowing from other banks – LIBORis a 3-month rate which has been adopted in some cases of a breachof contract (or other obligation). |
Judge | Hon'ble Ms. Justice Indu Malhotra |
Neutral Citation | 2018 INSC 959 |
Petitioner | Vedanta Ltd. |
Respondent | Shenzen Shandong Nuclear Power Construction Co. Ltd. |
SCR | [2018] 12 S.C.R. 829 |
Judgement Date | 2018-10-11 |
Case Number | 10394 |
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