Delhi Airport Metro Express Private Limited vs Delhi Metro Rail Corporation
Name of the Case: Delhi Airport Metro Express Private Limited vs Delhi Metro Rail Corporation
Case Number: Civil Appeal No. 3657 OF 2022 [Arising out of Special Leave Petition (Civil) No.4901 of 2022]
Judges Name: Hon’ble Judges L. Nageswara Rao J, B.R. Gavai J.
Order dated: 05.05.2022
Facts of the Case:
- The appeal is preferred by Delhi Airport Metro Express Private Limited (“Appellant”) against Delhi Metro Rail Corporation (“Respondent”) challenging the decision of the learned Single Judge of the Delhi High Court (“High Court”). The Parties entered into a concession agreement dated 25.08.2008 whereby the Respondent was to be carry out civil works. Disputes between the parties arose and it was referred to arbitration.
- An arbitral award was passed, by which the Respondent was aggrieved and an appeal before the High Court was preferred under Section 34 of the Arbitration and Conciliation Act, 1996 (“Act”). The learned Single Judge of the High Court dismissed the appeal against which the Respondent preferred a second appeal before the Division Bench of the High Court.
- The Division Bench of the High Court allowed the appeal partly and the Appellant preferred an appeal to the Hon’ble Supreme Court. The Hon’ble Supreme Court allowed the appeal and the judgment of the Division of the High Court was set aside. Thereafter, the Appellant sought for enforcement of the award before the High Court. The Single Judge of the High Court in the judgment rejected the Appellant’s contention that the sum in the award would include interest from the date on which the cause of action arose to the date on which the award was made under Section 31(7)(a) of the Act. Aggrieved, the Appellant has approached the Hon’ble Supreme Court.
Hon’ble Supreme Court observed/held as follows:
- The Appellant argued that position regarding the inclusion of interest in an award for pre-award period and post-award period (interest up to 18% p.a. can be awarded) under Section 31(7)(a) and (b) of the Act is settled in the case of the Hyder Consulting (UK) Limited vs. Governor, State of Orissa through Chief Engineer.
- The Respondents argued that the Section 31(7) of the Act begins with term “unless otherwise agreed by the parties” and in this case, there is a clause regarding the payment of interest in the agreement and the interest component would be governed by the agreement.
- The Court noted that the Appellant rightly relied on the case of Hyder Consulting (UK) Limited vs. Governor, State of Orissa through Chief Engineer and the amount awarded under Section 31(7)(a) of the 1996 Act would include the principal amount plus the interest amount pendente lite.
- The Court recorded in this case, the words “unless otherwise agreed by the parties” in the Section 31(7) of the Act assumes significance and case of N.S. Nayak & Sons vs. State of Goa was referred for its interpretation.
- The Court held that as there is a clause in the agreement regarding interest, the interest prior and after the award will be governed by the agreement and decision of the High Court was upheld.
The Hon’ble Supreme Court dismissed the appeal.