REV.APPL/172/2026 of Chennai Metropolitan Water Supply And Sewerage Boa Vs M/s SPML Infra Limited on 26 October 2026

J U D G M E N T

P.VELMURUGAN J. The present Review Application has been filed by the applicant, Chennai Metropolitan Water Supply and Sewerage Board (hereinafter referred to as the “Board”), seeking to review the judgment dated 09.06.2026 passed in O.S.A.No.135 of 2020.

2. The dispute arises out of a contract awarded to the first respondent for the construction of a permeate conveyance pipeline as part of the Chennai Sewerage Renovation and Functional Improvement Project. Disputes arose between the parties regarding the execution of the work, reduction in the scope of work, additional excavation, prolongation costs and other amounts claimed by the contractor. The disputes were referred to arbitration. By a majority Award dated 15.12.2007, the Arbitral Tribunal allowed certain claims made by the contractor and awarded interest. One of the Arbitrators passed a separate minority Award granting substantially lesser amounts.

3. Aggrieved by the majority Award, the Board filed O.P.No.324 of 2009 under Section 34 of the Arbitration and Conciliation Act, 1996, before this Court.

4. By order dated 14.08.2019, the learned Single Judge set aside the Award in respect of Claim No.6, relating to prolongation costs. The challenge to the other claims, including Claim Nos.5 and 12, was dismissed, and the Award in respect of the remaining claims was confirmed.

5. Aggrieved by the said order, the Board preferred O.S.A.No.135 of 2020 under Section 37 of the Arbitration and Conciliation Act, 1996. By judgment dated 09.06.2026, the present Bench dismissed the appeal and confirmed the order of the learned Single Judge.

6. The present Review Application has been filed contending that the judgment dated 09.06.2026 suffers from errors apparent on the face of the record and that certain material submissions made by the Board were not considered.

7. The learned Additional Advocate General appearing for the appellant/Board submitted that the Board was not seeking a reappreciation of the evidence, but contended that the Award was contrary to the express terms of the contract and suffered from patent illegality. It was submitted that these objections had not been properly considered while deciding the appeal.

8. With regard to Claim No.5, the learned Additional Advocate General submitted that the contract had been partially terminated under Clause 74 due to the delay attributable to the contractor. It was contended that the compensation awarded for the reduction in the scope of work was contrary to the contractual provisions and that Exs.C.5/17, C.5/26 and C.5/27 supported the Board’s case. It was further submitted that the contractor had failed to furnish the supporting documents sought by the Board and that the amount awarded by the Tribunal was not justified under the terms of the contract.

9. With regard to Claim Nos.7 and 8, the learned Additional Advocate General submitted that the Tribunal had awarded amounts exceeding those claimed by the contractor in its claim petition. It was contended that this objection required consideration and that the failure to consider it amounted to an error apparent on the face of the record.

10. With regard to Claim No.15, relating to interest, the learned Additional Advocate General submitted that the Tribunal had awarded pre- award interest at 12% per annum and post-award interest at 15% per annum without assigning adequate reasons or providing any contractual or commercial basis for such rates. It was further submitted that the interest had accumulated substantially, imposing a heavy financial burden on the Board, which is a public utility undertaking.

11. The learned Additional Advocate General further submitted that the objection regarding interest had been raised as part of the Board’s challenge to the Award from the beginning and that the contention that it was raised for the first time in the appeal was incorrect. Reliance was placed on the decision in O.P.No.325 of 2009, dated 14.06.2017, reported in [2017 (6) MLJ 582], which, according to the Board, involved the same parties, similar contractual conditions and an Award passed by the same Arbitral Tribunal on the same date. It was submitted that the rate of interest in that case had been reduced to 8% per annum and that the said decision had not been considered while deciding the appeal.

12. The learned Additional Advocate General submitted that the judgment under review had not adequately dealt with the objections relating to Claim Nos.5, 7, 8 and 15 and the earlier decision relied upon by the Board. It was therefore submitted that the judgment needs to be reviewed.

13. Per contra, the learned senior counsel appearing for the first respondent/claimant submitted that the Arbitral Tribunal had passed a reasoned Award after considering the evidence and the terms of the contract. It was further submitted that the scope of interference under Section 34 of the Arbitration and Conciliation Act, 1996, was limited and that the learned Single

Judge had set aside the Award only in respect of Claim No.6. The learned senior counsel further submitted that the scope of interference under Section 37 of the Act was also limited and that the Division Bench had dismissed the appeal after considering the rival submissions. With regard to the rate of interest, the learned senior counsel appearing for the first respondent/claimant placed reliance on the judgment of the Hon’ble Supreme Court in Reliance Infrastructure Limited v. State of Goa [(2024) 1 SCC 479].

14. We have considered the rival submissions made on either side and perused the records.

15. The learned Additional Advocate General submitted that the findings on Claim Nos.5, 7, 8 and 15 had not been properly considered and that the judgment dated 09.06.2026 requires review.

16. As regards Claim No.5, the judgment under review has already considered the reduction in the scope of work. The quantity of pipes to be supplied was reduced by about 65%, while the quantity of pipes to be installed was reduced by nearly 80%. We held that such a substantial reduction was far beyond an ordinary contractual variation and upheld the Tribunal’s finding that it amounted to an abnormal post-contractual reduction in the scope of work. The Tribunal’s interpretation of the contract was found to be a possible view based on the evidence available. Therefore, the grounds raised in the review application do not disclose any error apparent on the face of the judgment warranting review.

17. As regards Claim Nos.7 and 8, the learned Additional Advocate General submitted that the amounts awarded by the Arbitral Tribunal exceeded the amounts claimed by the contractor. In paragraph No.13.6 of the judgment in the appeal, we had recorded the respondent’s submission that the Board had mainly challenged Claim Nos.5, 6 and 12 before the learned Single Judge and could not raise fresh grounds concerning Claims 7(c) and 7(d) for the first time in the appeal. Upon considering the rival submissions and the scope of interference under Section 37 of the Arbitration and Conciliation Act, 1996, the appeal was dismissed and the order of the learned Single Judge was confirmed. On considering the grounds raised in the Review Application, we find no error apparent on the face of the judgment warranting review.

18. With regard to Claim No.15, the learned Additional Advocate General submitted that the Arbitral Tribunal had awarded pre-award interest at 12% per annum and post-award interest at 15% per annum without giving adequate reasons. Reliance was also placed on the decision in O.P.No.325 of 2009, dated 14.06.2017, reported in [2017 (6) MLJ 582], wherein the rate of interest was stated to have been reduced to 8% per annum.

19. We have considered the contentions raised by the Board regarding the rate of interest and the decision relied upon in O.P.No.325 of 2009. The grounds raised do not disclose any error apparent on the face of the judgment under review. The Review Application cannot be used to seek reconsideration of the matter on the ground that a different view on the rate of interest ought to have been taken. Having regard to the grounds raised in the Review Application and the limited scope of review, we find no error apparent on the face of the judgment under review warranting interference in respect of Claim No.15. At this juncture, it would be useful to refer to the judgment relied upon by the learned senior counsel appearing for the first respondent in Reliance Infrastructure Limited v. State of Goa [(2024) 1 SCC 479]. In that case, the Hon’ble Supreme Court held that the reduction of post-award interest from 15% to 10% was not justified, having regard to the facts of that case and the prevailing lending rates. The Court upheld the award of post-award interest at 15% per annum. The relevant portion of the said judgment is extracted hereunder:-

“90. We are of the view that the aforesaid reduction of rate of interest by the High Court is also unjustified. We have noticed the provisions of Section 31(7)(b) that unless the award otherwise directs, the sum payable under the arbitral award shall carry interest @ 2% higher than the current rate of interest prevalent on the date of the award, from the date of the award to the date of payment. The expression “current rate of interest” has been explained in the Explanation to the said section to have the same meaning as assigned under Section 2(b) of the Interest Act, 1978. The High Court has referred to the decision in Vedanta [Vedanta Ltd. v. Shenzhen Shandong Nuclear Power Construction Co. Ltd., (2019) 11 SCC 465 : (2019) 4 SCC (Civ) 724] to hold that a Court may reduce interest awarded by the arbitrator when such interest does not reflect the prevailing economic condition or where it is not found reasonable or where it promotes interest of justice.

91. We do not find any basis in the impugned judgment [State of Goa v. Reliance Infrastructure Ltd., 2021 SCC OnLine Bom 306] of the High Court for reducing the rate of interest, as in Vedanta [Vedanta Ltd. v. Shenzhen Shandong Nuclear Power Construction Co. Ltd., (2019) 11 SCC 465 : (2019) 4 SCC (Civ) 724] , wherein this Court was dealing with an International Commercial Arbitration involving rupee as well as euro components. Moreover, in Vedanta [Vedanta Ltd. v. Shenzhen Shandong Nuclear Power Construction Co. Ltd., (2019) 11 SCC 465 : (2019) 4 SCC (Civ) 724] , the rate of interest was reduced in respect of the foreign currency component to bring the interest rate in line with the international rate on the ground that the rate of interest prevailing on the rupee debt in India and on international currency abroad were different and the international rates were lower. Such a situation is not obtaining in the present case.

92. The High Court seems to have not considered the relevant factual aspects. On the contrary, as has been submitted before us as well as the High Court, the prevailing interest rate being the prime lending rate of State Bank of India was in the range of 13% to 14% p.a. Thus, the Arbitral Tribunal was justified in granting interest @ 15% p.a. post-award. In our view, the Arbitral Tribunal was well within its jurisdiction under Section 31 of the Act to award interest @ 15% p.a. and there was no justification to reduce the same to 10% p.a. We may observe with respect that the High Court was not exercising any equity jurisdiction so as to resettle the rate of interest as deemed fit by it. It had been a matter relating to an award made by the Arbitral Tribunal in a commercial dispute.”

20. On an overall consideration of the grounds raised, we find no error apparent on the face of the judgment dated 09.06.2026 warranting the exercise of the review jurisdiction.

21. Accordingly, the Review Application is dismissed. There shall be no order as to costs. (P.V.,J.) (K.G.T.,J.) 26 /10 / 2026 Index: Yes/No Speaking/Non-speaking order Neutral Citation: Yes/No r n s

To The Sub Assistant Registrar, (Original Side), Madras High Court, Chennai.

P.VELMURUGAN, J. AND K.GOVINDARAJAN THILAKAVADI, J. r n s REV.APPL.No. 172 of 2026 26 / 10 / 2026