ELP Arbitration Weekly Update

We had earlier examined the Supreme Court’s decision in Sri Chittaranjan Maity v. Union Of India (“Maity”). The SC held that Section 31 (7) (a)[1] of the Arbitration and Conciliation Act, 1996 (“Act”) which provides for payment of interest, begins with the words “unless otherwise agreed by the parties” and therefore bars an arbitrator from awarding interest when the contract itself prohibits the award of interest for the pre-award period i.e. pre-reference and pendente lite period. (For your ease of reference, we have attached our previously shared analysis of Maity.)

This week, we analyze the Supreme Court’s verdict in Union of India v. Susaka Pvt. Ltd. and Ors. The SC added to its ruling in Maity and held that if a party does not raise the plea that the contract prohibits awarding interest, before the arbitral tribunal, the party shall be hit by the principle of waiver and precluded from raising such plea at a later stage i.e. at the time of appeal.

We trust you will find this an interesting read. For any queries or comments on this update, please feel free to contact us at drupdate@elp-in.com.

We welcome your feedback and comments.