In Brief
A contractor for a road-widening project in West Bengal claimed damages for delays caused by the State, including interest on unpaid bills, idle labour costs, and equipment depreciation. After the dispute was referred to arbitration, the Arbitrator awarded multiple claims totalling over Rs. 1.37 crores. The High Court set aside certain claims. The Supreme Court held that while the contract explicitly prohibited claims for idle labour (claim no. 3), the Arbitrator properly awarded interest on delayed running account bills (claim no. 4) as compensation for blocked capital. The Court also upheld the Arbitrator's power to award pre-reference interest under the 1996 Act where the contract is silent, restoring that portion of the award (claim no. 6)."
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