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Garg Builders v. Bharat Heavy Electricals Ltd.

Arbitration and Conciliation Act, 1996 – Section 31(7)(a) – Payment of Interest – Law relating to award of pendente lite interest by Arbitrator – The provisions of the 1996 Act give paramount importance to the contract entered into between the parties and categorically restricts the power of an arbitrator to award pre-­reference and pendente lite interest when the parties themselves have agreed to the contrary – If the contract prohibits pre­-reference and pendente lite interest, the arbitrator cannot award interest for the said period. 

Arbitration and Conciliation Act, 1996 – Section 31(7)(a) – Payment of Interest – If the contract bars payment of interest, the arbitrator cannot award interest from the date of cause of action till the date of award. 

Arbitration and Conciliation Act, 1996 – Section 31(7)(a) – Payment of Interest – Where the parties had agreed that the interest shall not be payable, the Arbitral Tribunal cannot award interest between the date on which the cause of action arose to the date of the award. 

Arbitration and Conciliation Act, 1996 – Section 31(7)(a) – Payment of Interest – If a contract prohibits award of interest for pre­award period, the arbitrator cannot award interest for the said period. 

Arbitration and Conciliation Act, 1996 – Section 31(7)(a) – Payment of Interest – If the contract contains a specific clause which expressly bars payment of interest, then it is not open for the arbitrator to grant pendente lite interest.

Contract Act, 1872 – Section 28 – A contract is void to the extent it restricts absolutely a party from enforcing his rights by usual proceedings in ordinary courts or if it limits the time within which he may enforce his rights.