Order under Section 23(3) of Arbitration Act – Whether an interim Award?
Interesting term of the contract on arbitration and important judgment – Order under Section 23(3) of the Arbitration Act whether an Interim Award or procedural Order?
The disputes arose out of the contrac for construction of Roads and Drains in Solapur STPP for Rs.22,35,26,730/-.
NTPC filed nine counter claims of Rs.1,19,27,70,295/-.
However, Clause 7.3.1 of the Letter of Award dated 18.10.2019 provided that –
- The arbitration mechanism shall be applicable only in cases where the disputed amount does not exceed Rs.25 crores; and
- In case the disputed amount exceeds Rs.25 crores, the parties can resort to remedies other than arbitration.
- No further change in the claims and counter claims raised at the time of invocation of arbitration shall be allowed during arbitration under any circumstances.
NTPC, therefore, filed an application under Section 23(3) to withdraw Claim No.1 of Rs.21,51,25,592/- and counter claim No.5 of Rs.83,36,11,670/-.
The Arbitrator rejected the said application on the ground that the claims and counter claims once filed are not amenable to any change as agreed by the parties under the agreement.
However, the High Court held that the order of the Arbitrator under Section 23(3) is procedural order and therefore, it is not amenable to section 34.
Judgment dated 7.3.2025 of the High Court of Delhi in O.M.P. (COMM) 234/2024 of NTPC Limited Vs. Starcon Infra Projects India Pvt Ltd with connected matters
