The Hon'ble Supreme Court in its recent decision in Garg
Builders v. Bharat Heavy Electricals1 held that an
arbitrator under the Arbitration and Conciliation Act, 1996
(Arbitration Act) was not empowered to award
pendente lite interest when the parties had agreed to not
have any interests awarded in their contract. In this article, we
navigate through the facts and findings in the aforementioned
case.
Brief facts
The respondent had floated a tender for construction of boundary
wall at its premises in Bawana, Delhi (Project).
The appellant submitted its bid for the Project which was accepted
by the respondent. The parties entered into a contract in 2009
which, inter alia, contained the interest barring clause. The
clause provided that no interest shall be payable by the respondent
on, inter alia, any moneys due to the contractor. Disputes
arose amongst the parties with respect to the aforesaid contract
and subsequently the appellant filed a petition under Section
