In Brief
IRCON and NBCC entered a construction contract for a railway station. After NBCC abandoned the work despite extensions, IRCON terminated the contract and forfeited security deposits. NBCC sought arbitration and claimed a refund. The Arbitral Tribunal rejected the refund claims, finding termination justified under Clause 17.4 though not Clause 60.1. The High Court set aside this decision. The Supreme Court held that an Arbitral Tribunal may consider alternative contractual grounds for termination; once the factual finding of abandonment attains finality, the security deposit forfeiture is justified. The Court also upheld the Tribunal's power to award pendente lite interest absent a contractual bar, but reduced the rate from 18% to 12%, deeming the lower rate reasonable.
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