INDIA Law and Practice Contributed by: Anuradha Mukherjee, Omar Ahmad, Vikram Shah and Soumya Dasgupta, Cyril Amarchand Mangaldas
Arbitral Proceedings Interest for the pre-reference and pendente lite period Unless the parties have agreed to the contrary, the award can provide for interest at any rate deemed reasonable by the arbitrator, and for any period from the date on which the cause of action arose to the date of the award. Post-award interest Post-award interest is also payable on the amount directed to be paid by the award at a rate of 2% higher than the prevailing rate on the date of the award. This interest will be payable for the period from the date of the award to the date of payment. 9.4 Enforcement Mechanisms of a Domestic Judgment The enforcement of a domestic judgment can be sought by the decree holder under Order XXI of the CPC. The modes of execution include: • delivery of the property decreed; • attachment or sale of the judgment debtor’s prop- erty; • arrest and detention of the judgment debtor; • the appointment of a receiver; • recovery by way of garnishee orders – ie, from a third party that may owe amounts to the judgment debtor; and • any other way as required in terms of the relief granted. 9.5 Enforcement of a Judgment From a Foreign Country A foreign judgment can be directly enforced under the CPC if it is passed by a court located in a “recipro- cating territory” – ie, one that is declared as such by the central government by notification in the official gazette. Such a judgment would be executed in India in the same manner as if it had been passed by an Indian court. If the judgment is from a court that is not in a “recip- rocating territory”, then the decree holder will be required to file a suit against the judgment debtor,
due to the breach; such consequence must be one that could have been reasonably foreseen by the par- ties to arise due to the breach of the contract. The loss alleged to have been suffered cannot be remote. The “but for” test is also applied, under which no loss would have been suffered “but for” the breach by the respondent. The party claiming damages must also be able to show evidence of the loss suffered as a result of the breach. Section 74 of the ICA deals with the granting of liq- uidated damages if the parties have agreed the pay- ment of such in the event of a breach. Liquidated damages are predetermined estimates of losses that are payable in the event of loss suffered on account of a breach. However, they cannot be in the nature of a penalty – ie, liquidated damages ought not to be disproportionate to the losses that could result from the breach. The contract may provide a ceiling for liquidated dam- ages in the form of a maximum amount that can be awarded. However, if the liquidated damages are only specified to be paid in the event of loss suffered due to a specific breach, then that would not prevent a party from claiming damages for losses arising due to a different breach of the contract for which no dam- ages are stipulated. 9.3 Pre-Judgment and Post-Judgment Interest Pre-judgment interest, if claimed for, can be granted by the court in a suit. As per Order VII Rule 2A of the CPC, the plaints should specify the basis of any interest being sought, along with the rate, period, total amount, etc. As per the CPC, the court can grant interest for the following periods: • any period prior to the filing of the suit; • from the date of the suit to the date of the decree; and • from the date of the decree to the date of the pay- ment.
446 CHAMBERS.COM
Powered by FlippingBook