Hmt Limited v. M/S Narmada Auto Mats Pvt. Ltd.
Case brief
What is this about?
The High Court of Karnataka dismissed appeals by HMT Limited challenging the confirmation of an arbitral award that granted damages to former employees-turned-entrepreneurs for short supply of raw materials under a contract. The court upheld the award of damages but modified the interest rate: 20% per annum only for the period the claimants were repaying loans to KSFC, and 12% per annum thereafter under Section 31(7)(b) of the Arbitration Act. The court held that the claimants' continued performance did not constitute waiver, force majeure did not apply, and the 1993 and 2006 Acts did not govern interest on damages for short supply. The Supreme Court precedent in Gayatri Balaswamy was relied upon to justify modification of post-award interest.
What did the court decide?
The arbitral award and the District Court's judgment are confirmed except for the rate of interest. Respondents are entitled to interest at 20% per annum on damages only for the period they were repaying KSFC loans (from sanction to discharge, subject to proof), and 12% per annum for the remaining period. The appellant must compute and pay the balance due, accounting for amounts already deposited