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Issues: (i) whether crane hire charges were recoverable from the contractor for use of the 250 T crane in Unit III under the Work Order and Tender Document; (ii) whether pre-award interest was payable in view of the contractual clause barring interest and the governing law on arbitral interest.
Issue (i): whether crane hire charges were recoverable from the contractor for use of the 250 T crane in Unit III under the Work Order and Tender Document.
Analysis: The contractual documents provided free use of the 250 T crane only up to the drum lifting milestone of Unit II. The Tender Document further made clear that use of BHEL equipment beyond the agreed free-use scope could attract hire charges recoverable from the contractor's bill or security deposit. On the contractual language, there was no basis to extend free use to Unit III or to deny recovery of the charges.
Conclusion: The crane hire charges were recoverable and the contractor was not entitled to resist deduction of that amount.
Issue (ii): whether pre-award interest was payable in view of the contractual clause barring interest and the governing law on arbitral interest.
Analysis: The agreement stated that no interest would be payable on money due to the contractor. In such a situation, interest could run only from the date of the award and not for the pre-award period. The statutory provision on post-award interest did not justify enhancement where the arbitral tribunal had already fixed post-award interest at 10.5%.
Conclusion: Pre-award interest was not payable, and post-award interest remained payable only from the date of the award at 10.5% per annum.
Final Conclusion: The award was modified to deny pre-award interest and to uphold recovery of crane hire charges, with the remaining award amount carrying post-award interest only from the date of the award.
Ratio Decidendi: A clear contractual stipulation governing free use of equipment and barring interest must be given effect in arbitral proceedings, and pre-award interest cannot be granted contrary to such a clause.
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