Contractual bar on interest and late arbitrability objections limit arbitral relief and cannot be raised for the first time in appeal.

A jurisdictional objection on arbitrability and the effect of a no claims certificate cannot be raised for the first time in appeal when it was not pressed at the Section 11 stage, before the arbitral tribunal, or in the Section 34 challenge; the objection was therefore not entertainable at that stage. A contractual clause expressly barring interest overrides Section 31(7)(a) of the Arbitration and Conciliation Act, 1996, so the arbitral tribunal could not grant pre-award or pendente lite interest contrary to the parties' agreement. The award was sustained on the principal claim but set aside to the extent it granted interest.

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Issues: (i) whether the issue of arbitrability of the dispute and the effect of a no claims certificate could be raised for the first time in appeal; (ii) whether the arbitral tribunal could award interest when the contract expressly barred payment of interest.

Issue (i): whether the issue of arbitrability of the dispute and the effect of a no claims certificate could be raised for the first time in appeal.

Analysis: The objection to the existence of a live arbitral dispute and the plea based on the no claims certificate were not urged before the Chief Justice in the Section 11(6) proceedings, nor before the arbitral tribunal or the court dealing with the challenge under Section 34. A jurisdictional or arbitrability objection ought to be raised at the proper stage, and the supervisory court cannot entertain it for the first time in appeal.

Conclusion: The Division Bench was not justified in examining arbitrability for the first time; the objection based on the no claims certificate could not be entertained at that stage.

Issue (ii): whether the arbitral tribunal could award interest when the contract expressly barred payment of interest.

Analysis: Section 31(7)(a) of the Arbitration and Conciliation Act, 1996 permits interest unless otherwise agreed by the parties. The contract contained an express clause that no interest would be payable on amounts due under the contract. Where parties have contractually barred interest, the arbitral tribunal cannot award pre-award or pendente lite interest contrary to that stipulation.

Conclusion: The award of interest was impermissible and the appellant was not entitled to interest on the amount awarded.

Final Conclusion: The award was sustained on the principal claim but set aside to the extent it granted interest, resulting in only partial relief to the appellant.

Ratio Decidendi: A contractual prohibition on interest binds the arbitral tribunal under Section 31(7)(a) of the Arbitration and Conciliation Act, 1996, and objections to arbitrability must be raised at the appropriate stage and cannot be introduced for the first time in appeal.

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