IRCON INTERNATIONAL LIMITED Vs. SIMPLEX PROJECTS LIMITED

JUDGEMENT

(1.) M/s Ircon International Limited (hereafter 'Ircon') - a Government of India undertaking - has filed the present appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereafter 'the Act') impugning an order dated 17.03.2016 passed by the Sole Arbitrator (hereafter 'the impugned order') under Section 17 of the Act.

(2.) By the impugned order, the Arbitrator has held that the encashment of the Bank Guarantee (hereafter 'BG') in the sum of Rs.1,74,83,608/ - relating to the mobilisation advance, was not justified to the extent of Rs.1,30,66,840/ -. Consequently, the Arbitrator has directed the release of Rs.1 crore lying with the Registrar General of this Court to the respondent (hereafter Simplex) along with interest accrued thereon within a period of 30 days and has further directed Ircon to refund a sum of Rs.30,66,840/ - after adjusting any outstanding interest computed at the rate of 13.75% per annum.

(3.) Ircon has challenged the aforesaid order mainly on the ground that (i) it is contrary to the established principles for restraining encashment of BGs; and (ii) that the impugned order is beyond the scope of Section 17 of the Act as according to Ircon, an order directing refund of the monies recovered would not qualify as an interim measure of protection and amounts to final adjudication of the disputes.