In Brief
Jaiprakash Associates, a contractor, was awarded compensation by an arbitral tribunal for certain disputed claims but challenged the High Court's decision to quash the interest (at 10% p.a.) awarded by the arbitrators. The contract contained clauses 50 and 51 of the General Conditions of Contract that expressly barred payment of interest on money due to the contractor. The Supreme Court held that under the Arbitration and Conciliation Act, 1996, arbitrators cannot award interest when the contract contains an express bar. The Court distinguished earlier judgments under the 1940 Act and confirmed that clauses 50 and 51 constitute an absolute prohibition on interest, making the arbitrators' award of interest without jurisdiction. The appeal was dismissed, upholding the High Court's decision.
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