In Brief
A contractor entered into a 1988 works contract containing Clause 22, which barred the contractor from claiming interest on any payment, arrears, or balance due. When disputes arose, arbitration was initiated, resulting in a 1995 award of Rs. 1,78,17,146 plus 15% pendente lite interest. The District Judge and High Court set aside the interest, holding that Clause 22 barred all interest claims. The Supreme Court reversed, holding that under the Arbitration Act, 1940, a contractual clause merely barring interest claims is not an express bar on the arbitrator's power to award pendente lite interest. An express bar requires clear language addressing disputes and delays. The Court allowed the appeal and granted 9% pendente lite interest from the date of arbitration reference to the award date.
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