SAYEED AHMED AND CO Vs. STATE OF U P

JUDGEMENT

(1.) Leave granted. The issue in this appeal is whether the Arbitrator can award interest for pre -reference period and pendente lite, when the contract prohibits the employer from entertaining any claim for interest.

(2.) The respondents entrusted a construction work to appellant under an agreement dated 30.3.1990. The work was completed by the appellant on 31.3.1996. Disputes arose between the parties by reason by rejection of claims of appellant and they were referred to Arbitration on 13.3.1997. Before the Arbitrator, the appellant made 11 claims aggregating to Rs.133.43 lakhs. The Arbitrator made an award dated 31.7.2001 directing the respondents to pay to the appellant the following : -

(3.) The Civil Court by its judgment dated 7.12.2005 dismissed the application to set aside the award, filed by the respondents under Section 34 of the Arbitration and Conciliation Act, 1996 ('Act' for short). The appeal filed by the respondents was allowed in part by the High Court by impugned judgment dated 27.2.2008. The High Court held that having regard to the bar contained in clause G 1.09 of the contract, the arbitrator had no power to award interest and consequently, set aside that part of the award granting interest till date of award.