Pendente Lite Interest barred by express contract clause, leaving the arbitrator without jurisdiction to award it.

An arbitrator may award pendente lite interest where the contract is silent, as that power is treated as an implied incident of the reference and lies within arbitral discretion. Where the agreement expressly prohibits payment or grant of interest, that contractual bar prevails and the arbitrator has no jurisdiction to award pendente lite interest. Applying settled Supreme Court authority, the court held that an express exclusion clause removes the power to grant such interest, and the portion of the award sustaining pendente lite interest was set aside.

---

---

Issues: Whether an arbitrator could award pendente lite interest where the contract expressly provided that no interest would be payable.

Analysis: The applicable principle is that an arbitrator may award pendente lite interest where the agreement is silent, because such power is treated as an implied incident of the reference and lies within the arbitrator's discretion. However, where the contract contains an express prohibition against payment or grant of interest, the arbitrator cannot ignore that bar. The Court applied the settled position emerging from the Constitution Bench rulings and later Supreme Court decisions, and held that an express contractual clause excluding interest leaves no jurisdiction with the arbitrator to award pendente lite interest.

Conclusion: The arbitrator had no power to award pendente lite interest, and the finding sustaining that part of the award was set aside in favour of the appellant.

---