On January 22, 2019 the High Court at Calcutta passed a judgment in the matter of: Winsome International Limited v. The New India Assurance Co. Limited (A.P. No. 866 of 2018).
Facts in brief
The petitioner company owns a jute mill in Bihar whereas the Respondent is an insurance company wholly owned by the Government of India. The insurance policies contained an arbitration clause and an arbitration commenced wherein the Arbitrator made the disclosures under Section 12 (1) of the Act. However, the Petitioner discovered grounds for challenging the impartiality and independence of the arbitrator and filed applications under Sections 12 and 13 of the Act before the Arbitral Tribunal. The Arbitrator continued to proceed with the arbitration without deciding the said applications when the petitioner was constrained to file an application under section 14 of the Act before this Court for the removal and appointment of a new arbitrator, wherein this Court directed the Arbitrator to decide the section 12 and 13 applications before continuing with the proceedings.
On July 24, 2018 the arbitrator rejected the said applications. The petitioner filed this application under Section 34 of the Act challenging the order dated July 24, 2018 as an 'interim order'.
Whether the decision of the Arbitrator passed on July 24, 2018 (pertaining to the rejection of the applications filed under section 12 and 13 of the Act) is an ‘interim award’?
The Court discussed the purview of Section 2 (1) (c) of the Act and relied on National Thermal Power Corporation Limited v. Siemens Atkeingesellschaft (2007) 4 SCC 451. The Court further, relied upon the Division Bench judgment of this Hon’ble Court in Ranjiv Kumar and Anr v. Sanjiv Kumar and Anr (AIR 2018 Cal 130) which held that the decision of an arbitral tribunal can be held to be an ‘interim award’ within the meaning of Section 2(1)(c) of the Act of 1996 when such decision finally decides an issue, at an intermediate stage of an arbitration proceeding, relating to the claim or counterclaim of the respective parties to the proceeding.
The Court after relying on the aforementioned judgments and on the statutory provisions under Section 2 (1) (c) and Section 13 (4) and (5) of the Act rejected the section 34 application filed by the Petitioner as the order dated July 24, 2018 rejecting the Section 12 and 13 applications did not come within the ambit of an interim award.
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