Arbitrator's power to award pendente lite interest survives unless the contract clearly and expressly excludes it.

Under the Arbitration Act, 1940, an arbitrator may award pre-reference, pendente lite and post-award interest unless the contract contains a clear and express bar. A clause stating only that no interest shall be payable on amounts due under the contract is not, by itself, sufficient to exclude that power; the wording and context must unmistakably prohibit interest on disputes, differences, delayed payments or similar claims. On that construction, Clause 22 did not bar pendente lite interest, and the objection to the award of such interest was unsustainable.

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Issues: Whether Clause 22 of the works contract amounted to an express bar on the arbitrator's power to award pendente lite interest under the Arbitration Act, 1940.

Analysis: The governing principle under the Arbitration Act, 1940 is that an arbitrator may award pre-reference, pendente lite and post-award interest unless the contract contains a clear and express bar. Clauses that merely state that no interest shall be payable on amounts due under the contract are not enough by themselves to exclude the arbitral power; the clause must, by its phraseology and context, unmistakably bar interest in respect of disputes, differences, delayed payment or similar claims. The interpretation adopted in the earlier decisions relied upon by the Court was held to be consistent with the later three-judge exposition that the existence of an express bar must be determined from the wording of the agreement and the nature of the claim referred to arbitration.

Conclusion: Clause 22 did not expressly bar pendente lite interest, and the arbitrator was not precluded from granting such interest. The objection to the award of pendente lite interest was therefore unsustainable.

Ratio Decidendi: Under the Arbitration Act, 1940, an arbitrator's power to award pendente lite interest is excluded only by a clear and express contractual prohibition, and a general clause barring interest on amounts payable under the contract does not, without more, amount to such exclusion.

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