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2011 (7) TMI 1296 - SC - Indian LawsPendente lite interest - Whether an arbitrator has jurisdiction to grant interest despite the agreement prohibiting the same - According to clause 1.15 of the General Conditions of the Contract between the parties, the arbitrator does not have the power to award interest pendente lite. the appellant challenged his case with regard to interest that was granted by the arbitrator and confirmed by the High Court. HELD THAT:- In view of the specific prohibition of contract contained in Clause 1.15, the arbitrator ceases to have the power to grant interest. We also clarify that the Arbitration Act, 1940 does not contain any specific provision relating to the power of arbitrator to award interest. However, in the Arbitration & Conciliation Act, 1996, there is a specific provision with regard to award of interest by the arbitrator. The bar under clause 1.15 is absolute and interest cannot be awarded without rewriting the contract. Therefore, we set aside the award of the arbitrator granting interest in respect of the amount payable to the contractor under the contract as well as the order of the learned Single Judge and the Division Bench of the High Court confirming the same.
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