The Calcutta High Court has clarified that an Arbitral Tribunal can suo moto correct computation errors in an arbitral award under Section 33(1)(a) of the Arbitration and Conciliation Act.

The Court dismissed M/s. Konarak Enterprise’s (claimant) application under Section 34 of the Arbitration and Conciliation Act, 1996 (the Act). The claimant sought a refund of the security deposit and earnest money, while the Respondent, Haldia Development Authority, filed a counterclaim for risk and cost expenses incurred due to the alleged incomplete work.

A Single Bench of Justice Sabyasachi Bhattacharyya held, “Even otherwise, as discussed above, Section 33(3) empowers the Tribunal to suo moto correct any computation error as envisaged under Section 33(1)(a). Having not done so within the statutory 30 days, it was incumbent upon the Arbitral Tribunal to suo moto correct such error, at least as a resultant effect of the correction done by it on the application of the claimant under Section 33 of the 1996 Act.

Advocate Swarajit Dey represented the Petitioner, while Advocate Subhabrata Dutta appeared for the Respondent.

Brief Facts

The claimant was awarded a work order by the Respondent for the construction and maintenance of a road. Disputes arose regarding the completion of the work, leading to arbitration proceedings. The claimant sought a refund of the security deposit and earnest money, while the Respondent filed a counterclaim for risk and cost expenses incurred due to the alleged incomplete work.

The Arbitral Tribunal directed a refund to the claimant. Additionally, the risk and cost claim of the Respondent was partially allowed

Court’s Reasoning

The High Court had to determine whether the Arbitral Tribunal could enhance the amount of risk and cost liability component payable to the Respondent by modifying the same even in the absence of any independent application filed by the Respondent for correction of the award under Section 33 of the Act.

The Court noted, “Clause (a) of sub-section (1) of Section 33 provides inter alia that the Arbitral Tribunal may correct any computation errors and the error pointed out by the respondent pertains to simple calculation.

Therefore, even if the Tribunal merely allowed the application under Section 33 of the Act of the claimant, the Bench explained that “as a logical result thereof, the risk and cost amount payable to the respondent would increase to Rs.50,65,864/- even without any further application by the respondent being necessitated.

Consequently, the Court held, “Hence, this issue is decided in favour of the respondent and against the claimant…this Court is of the opinion that the component of the award of the claim for refund of security deposit and earnest money to the claimant does not call for any interference under Section 34 of the 1996 Act.

Cause Title: Haldia Development Authority v. M/s. Konarak Enterprise (AP-COM No.229 of 2024)

Appearance:

Petitioner: Advocates Swarajit Dey and Debarati Das

Respondent: Advocates Subhabrata Dutta and Munmun Tiwary

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