Pendente lite interest under arbitration survives unless the contract expressly or by necessary implication excludes it.

Section 31(7) of the Arbitration and Conciliation Act, 1996 permits an arbitral tribunal to award pendente lite interest, subject to party agreement. A contractual exclusion must be express or arise by necessary implication to displace that power; a clause stating only that no interest is payable on delayed payment or disputed claims is insufficient unless it bars interest in comprehensive terms. Clause 18.1, read as a whole, did not expressly or impliedly prohibit pendente lite interest, so the tribunal's award of interest was valid and not illegal.

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Issues: Whether clause 18.1 of the contract barred the arbitral tribunal from awarding pendente lite interest on the amount awarded under the invoices.

Analysis: Section 31(7) of the Arbitration and Conciliation Act, 1996 permits an arbitral tribunal to award interest for the period between accrual of the cause of action and the award, but that power is subject to party agreement. A contractual bar must be express or arise by necessary implication to exclude pendente lite interest. A clause merely stating that no interest is payable on delayed payment or disputed claims does not, by itself, take away the tribunal's power to award pendente lite interest, especially where the clause does not bar interest in comprehensive terms or exclude interest "in any respect whatsoever". Clause 18.1, read as a whole, did not expressly or impliedly prohibit pendente lite interest.

Conclusion: The contractual clause did not bar pendente lite interest, and the award of interest was not illegal. The appeal failed.

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