In Brief
Oriental Structural Engineers was contracted by Kerala to upgrade two highway stretches. A dispute arose over the State's refusal to pay interest on delayed payments in local currency, arguing that the bid left the interest rate blank. The Arbitral Tribunal awarded interest at 1% per month compounded monthly. The High Court set aside the award. The Supreme Court held that a blank space in the bid document does not exclude the contractual right to interest on delayed payment. The contractor's letters disclaiming interest were issued under coercion and applied only to one invoice. The Court restored the award but reduced the interest rate to a more reasonable 8% per annum simple interest.
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