16 September 2021, Thursday

2 years ago

Interim award set aside: Jammu, Kashmir and Ladakh High Court

16 September 2021 | Union of India v. Gee Kay Engineering Industries | Civil Appeal No. 5627 of 20219 | Sanjay Dhar J | High Court of Jammu and Kashmir and Ladakh | 2021 SCC OnLine J&K 678

The respondent, a defense equipment supplier, was the claimant in the arbitration. It applied to the tribunal for release of Rs. 5,50,00,000/- against the “outstanding payment” of Rs. 16,80,00,000/- as interim relief, for paying to its lenders. The tribunal allowed the application.

The court set that interim award aside holding that:

  1. An interim award is not one in respect of which a final award can be made, but it may be a final award on the matters covered thereby but made at an interim stage [citing IFFCO Ltd. v. Bhadra Products, (2018) 2 SCC 534].
  2. An interim award under Section 31(6) ACA can be made only if an admission or acknowledgement of the liability is clear, unambiguous and definite and does not require any evidence to prove such admission at the stage of trial, and not if there are serious disputed questions that requires detailed evidence [citing Bombay High Court’s Sphere International v. Ecopack India Paper Cup Pvt. Ltd., 2020 (1) R.A.J. 90]
  3. The tribunal considered aspects like prima facie case, balance of convenience and irreparable loss, but did not give any finding as to whether there is any admission of claim. Simply because the respondent was reeling under the burden of loan and interest did not mean that an interim award could be passed.
  4. Read the decision here.

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