Interest Cannot Be Awarded By Arbitrator When Awarding Of Interest Is Prohibited In Contract: Madhya Pradesh High Court

Madhya Pradesh HC ruled that interest cannot be awarded by an arbitrator if prohibited under the contract. The case involved an arbitration proceeding where the arbitrator awarded interest despite the contract explicitly prohibiting it. The court held that the arbitrator’s decision to award interest was in violation of the terms of the agreement, reinforcing the notion that arbitral decisions must strictly adhere to the terms of the underlying contract. This ruling underscores the importance of respecting contractual terms in arbitration matters.