Madras HC Rejects Chennai Water Board’s Review Of Ruling Upholding Contractor Compensation After 65% Pipe-Supply Reduction

The Board sought review of the Division Bench’s judgment dated 9 June 2026, which had dismissed its appeal under Section 37 of the Arbitration and Conciliation Act, 1996, and confirmed the Single Judge’s order under Section 34 setting aside the arbitral award only in respect of Claim No. 6.

The Board argued that the judgment had not properly considered its challenges to Claims 5, 7, 8 and 15, including the contractual basis for compensation following a reduction in work, awards allegedly exceeding the amounts claimed, and interest rates of 12% pre-award and 15% post-award.

It also relied on an earlier decision in O.P. No. 325 of 2009, in which interest was reduced to 8%.

Section 114 read with Order 47 Rule 1 of the Code of Civil Procedure permits review on recognised grounds, including an error apparent on the face of the record; review is not a means to obtain reconsideration merely because a different view is said to be preferable.

The Court also considered the limited scope of appellate interference under Section 37 of the Arbitration and Conciliation Act, 1996, in an appeal arising from a Section 34 challenge.

In Reliance Infrastructure Ltd. v. State of Goa, (2024) 1 SCC 479, the Supreme Court held, on the facts before it, that post-award interest of 15% was justified in light of prevailing lending rates and that the High Court had no basis to reduce it.

The Court found that the judgment under review had considered Claim 5, including the substantial reductions in pipe supply and installation quantities, and had treated the Tribunal’s interpretation as a possible view supported by the evidence.

On Claims 7 and 8, the earlier judgment had recorded the objection that the Board could not raise challenges to Claims 7(c) and 7(d) for the first time in the appeal; the review grounds disclosed no apparent error in the Court’s treatment of those claims.

As to Claim 15, the Board’s reliance on the earlier decision and its request for a different interest rate sought reconsideration rather than correction of an apparent error.

The Court also referred to Reliance Infrastructure as supporting the proposition that a 15% post-award rate may be upheld where justified by the relevant circumstances.

The Review Application was dismissed, with no order as to costs.