BD. OF TRUSTEES FOR THE PORT OF CALCUTTA vs ENGINEERS-DE-SPACE-AGE

The Supreme Court addressed the issue of whether an arbitrator can award interest pendent lite despite a contractual prohibition against such payments, specifically referencing Clause 13(g) of the contract. The Court emphasized that arbitrators must operate within the confines of the contract and cannot exceed their jurisdiction, as established in the case of Associated Engineering Co. Vs. Government of Andhra Pradesh (AIR 1992 SCC 232). The Court ultimately recalled a prior order and held that the arbitrator acted without jurisdiction in awarding interest, thus setting aside the award of interest pendent lite.