S. 33 Arbitration Act | Clarification On Award Can Be Issued Even After Arbitral Tribunal Becomes Functus Officio : Supreme Court

The Supreme Court observed that although the Arbitral Tribunal becomes functus officio after passing an award, it would still retain the limited jurisdiction to clarify or correct errors in an award under Section 33 of the Arbitration and Conciliation Act, 1996 (Arbitration Act). The bench comprising Justices Abhay S. Oka and Ujjal Bhuyan dismissed the appeal filed against the Delhi High Court's decision allowing the respondent to seek clarification from the Arbitral Tribunal about whether post-award interest under Section 31(7)(1)(b) of the Arbitration and Conciliation Act, 1996, would be calculated on the principal amount plus pre-award interest. The Arbitral Tribunal issued clarification based on M/S Hyder Consulting (UK) Ltd v. Governor of Orissa's decision where the Court held that an arbitrator has the power to grant post-award interest under Section 31(7) of the 1996 Act on the sum comprising of the principal plus interest on the principal which has accrued from the date of cause of action to the date of passing of the award.The decision in State of Haryana Vs. S.L. Arora, 2010 (which excluded pre-award interest from post-award interest calculations) was overruled in M/S Hyder Consulting (UK) Ltd. as inconsistent with the legislative intent of Section 31(7) of the Arbitration Act.The moot question that appeared before the Supreme Court was whether the arbitrator had the authority to issue clarifications after becoming "functus officio" (completion of the arbitral function). The judgment authored by Justice Bhuyan answered that the arbitral tribunal retains a limited jurisdiction to clear errors or issue clarification on an award passed even after becoming functus officio after the passing of an award. “we are of the view that the clarification sought for and issued by the learned Arbitrator would be covered by the expression unless another period of time has been agreed upon by the parties appearing in Section 33 (1) of the 1996 Act. This is a case where court had permitted the respondent to seek clarification from the learned Arbitrator beyond the initial period of 30 days where after the appellant fully participated in the clarificatory proceeding. Therefore, the present case would be covered by the above expression. In the circumstances, contention of the appellant that the learned Arbitrator had become functus officio and therefore lacked jurisdiction to issue the clarification cannot be accepted and is thus rejected.”, the Court said. Accordingly, the appeal was dismissed.Appearance:For Petitioner(s) Ms. Madhavi Divan, Sr. Adv. Mr. Amol Chitale, Adv. Mr. Nirnimesh Dube, Adv. Mr. Sunil Goel, Adv. Mr. Ankur S. Kulkarni, Adv. Mr. Susheel Joseph Cyriac, Adv. Ms. Uditha Chakravarthy, Adv. Ms. Aiashani Narayan, Adv. Ms. Priya S. Bhalerao, Adv. Mr. Varun Kanwal, Adv. M/S. Lex Regis Law Offices, AOR For Respondent(s) Mr. C Aryama Sundaram, Sr. Adv. Mr. Tarun Gupta, AOR Mr. Abhishek Gupta, Adv. Ms. Rohini Musa, Adv. Mr. Zafar Wayat, Adv. Mr. Raj Sudhakar Yadav, Adv. Mr. Atul Kumar, Adv. Mr. Yatinder Chaudhary, Adv. Mr. Davinder Singh Khurana, Adv. Mr. Manish Bansal, Adv.Case Title: NORTH DELHI MUNICIPAL CORPORATION VERSUS M/S. S.A. BUILDERS LTD.Citation : 2024 LiveLaw (SC) 1010Click here to read/download the judgment

S. 33 Arbitration Act | Clarification On Award Can Be Issued Even After Arbitral Tribunal Becomes Functus Officio : Supreme Court

Yash Mittal

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