UNION OF INDIA versus M/S. AMBLCA CONSTRUCTION

UNION OF INDIA versus M/S. AMBLCA CONSTRUCTION

If contract expressly bars award of pendente lite interest, arbitrator has no power to award such interest. Bar on award of interest on delayed payment does not by itself amount to an express bar to award pendente lite interest by arbitrator.

Source-derived case information.

Parties
Appellant: Union of India; Respondent: M/s. Ambica Construction
Jurisdiction
India
Judgment Date
16 March 2016
Procedural Posture
Special Leave Petition (civil) / Reference Answered by Supreme Court; Remitted to Division Bench
Outcome
Reference answered; if contract expressly bars pendente lite interest, it cannot be awarded by arbitrator; remitted for merits determination.
Legal Topics
Pendente Lite Interest, Arbitrator's Powers, Contractual Bar to Interest
Arbitration Pendente Lite Interest Arbitrator's Powers Contractual Bar to Interest

Source-derived case record

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Parties

Union of India

Appellant

M/s. Ambica Construction

Respondent

Procedural Posture

Special Leave Petition (civil) / Reference Answered by Supreme Court; Remitted to Division Bench

Legal Issues

  1. 1 Whether an arbitrator can award pendente lite interest when contract bars such award under Arbitration Act, 1940

Ratio Decidendi

If contract expressly bars award of pendente lite interest, arbitrator has no power to award such interest. Bar on award of interest on delayed payment does not by itself amount to an express bar to award pendente lite interest by arbitrator.

Court Disposition

Reference answered; if contract expressly bars pendente lite interest, it cannot be awarded by arbitrator; remitted for merits determination.

Orders

  • Express contract bar prevents arbitrator from awarding pendente lite interest.
  • Remitted to Division Bench for consideration on merits.