In Brief
UHL Power Company claimed expenses and pre-claim compound interest in an arbitration against Himachal Pradesh. The Single Judge rejected the entire claim; the High Court allowed it partially, permitting only simple interest. The Supreme Court held that the binding three-Judge precedent (Hyder Consulting) empowers arbitrators to award post-award interest on the interest amount awarded, overruling the earlier restrictive S.L. Arora decision. The Court also upheld that the MoU merged into the Implementation Agreement (making disputes referable to arbitration), and that the State prematurely terminated the agreement. UHL's appeal was partly allowed regarding compound interest; the State's appeal was rejected.
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