RELIANCE CELLULOSE PRODUCTS LTD. vs OIL AND NATURAL GAS CORPORATION LTD.

The Supreme Court addressed the issue of pre-reference and pendente lite interest under the Arbitration Act, 1940, in the context of a dispute between ONGC and Reliance Cellulose Products Ltd. regarding the price of Sodium Carboxyl Methyl Cellulose. The Court upheld the Arbitrators' award fixing the price at Rs.18,500/- per MT and Rs.20,500/- per MT for the respective quantities, while also addressing the reduction of interest from 18% to 10% by the lower courts. The Court emphasized that the clause in the General Conditions of Contract, which barred interest for delays, must be considered, leading to a nuanced interpretation of the contractual obligations and the applicability of interest rates.