In Brief
Jaiprakash Associates, a contractor, challenged an arbitral award that granted interest despite contractual clauses (50 and 51 of GCC) prohibiting it. The High Court quashed the interest award, and the Supreme Court upheld this decision. The Court held that under the Arbitration and Conciliation Act, 1996, when a contract expressly bars interest payment, arbitrators lack jurisdiction to award any interest for the pre-award period. This represents a paradigm shift from the 1940 Act regime. The broad language of Clauses 50 and 51 categorically prohibited interest on disputed amounts, and the doctrine of ejusdem generis could not restrict their scope. The appeal was dismissed.
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