In Brief
In this international commercial arbitration between an Indian power plant company and a Chinese contractor, the tribunal awarded compensation with a dual interest structure: 9% for 120 days, then 15% thereafter. The Supreme Court partly allowed the appeal, finding the 15% post-120-day rate unjustified and penal. The Court held that the rate coincided with the statutory challenge period under the Arbitration Act, potentially foreclosing legal remedies, and was economically excessive compared to international standards. The Court modified the award: 9% interest on INR components continues; EUR components attract LIBOR plus 3 percentage points from the award date, reflecting currency-specific commercial practice.
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