A.P.STATE TRADING CORP.LTD. vs M/S G.V.MALLA REDDY & CO.

The Supreme Court set aside the High Court's order allowing interest at 18% per annum on the amounts awarded under claims 5, 6, and 8, and reduced the interest rate to 9% per annum, citing the Arbitration Act, 1940. The Court reaffirmed that in the absence of a specific contract regarding the rate of interest, pendente lite and future interest should not exceed 9% per annum, referencing State of Rajasthan & Anr. Vs. Ferro Concrete Construction Pvt. Ltd. The judgment of the Civil Court, as modified by the High Court, was upheld in all other respects.