In Brief
M/s Oriental Structural Engineers was awarded a highway contract by Kerala. The contractor claimed interest on delayed payments in local currency. While the contract provided for interest at a specified rate for foreign currency payments, the local currency interest rate column was left blank. The arbitral tribunal awarded interest at 1% monthly, but courts set it aside, interpreting the blank as exclusion of interest. The Supreme Court held the contract provides for interest on delayed payment despite the blank rate column. The tribunal's interpretation was reasonable and within permissible bounds. However, the awarded rate was excessive. The Court set aside the High Court judgment, upheld the tribunal's entitlement to interest, and substituted the rate at 8% simple interest per annum, finding this just and equitable.
The lawyer headnote and full judgment text are available to registered users.