1. A point of some impotance is involved in this appeal.

2. There were arbitral proceedings between the parties resulting in an arbitral award in favour of the appellant. In the award the Arbitral Tribunal granted pre - reference and pendente lite interest on awarded claims.

3. This award was challenged by the respondent in an application under S.34 of the Arbitration and Conciliation Act, 1996 (in short the "Act of 1996") before the learned Commercial Court, East Khasi Hills, Shillong. The learned judge by a judgment and order dated 15th February, 2024 upheld the substantive part of the award but set aside the grant of pre - reference and pendente lite interest, the ground being that clause 54 of the terms and conditions of the contract between the parties read with S.31(7) of the Act of 1996 prohibited grant of such interest.

4. The Appellant appeals to this Court from that part of the judgment and order against them. The respondent has not preferred any appeal from the part upholding the award.

5. Therefore, the issue in this appeal was confined to the extremely small area relating to grant of pre - reference and pendente lite interest.
I set out S.31(7) of the Act of 1996 below:
31. Form and contents of arbitral award. - ...
(7) (a) unless otherwise agreed by the parties, where and in so far as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made.
(b) a sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of two per cent higher than the current rate of interest prevalent on the date of award, from the date of award to the date of payment.
Explanation. - The expression "current rate of interest" shall have the same meaning as assigned to it under clause (b) of S.2 of the Interest Act, 1978 (14 of 1978)".

6. One has to first look at the terms of the contract between the parties, namely clause 54 of the General Conditions of Contract (GCC) to examine whether it bars and if yes, to what extent an interest claim before the arbitral tribunal.
Clause 54 of the contract is in the following terms:
"54.0 No Claim for Delayed Payment due to Dispute Etc.
No claims for interest or damages will be entertained by the Corporation with respect to any money or balance which may be lying with the Corporation owing to any dispute, difference or misunderstanding between the Engineer - in - Charge on the one hand and contractor on the other or with respect to any delay on the part of the Engineer - in - Charge making periodical or final payments or in any other respect whatsoever."
What is the impact of clause 54 on any claim for interest?

7. S.31(7) clearly states that unless expressly agreed to the contrary by the parties, the arbitral tribunal would have power to grant pre - reference and post - arbitral interest.

8. Assuming that the clause expressly barred grant of interest, on any claim whether by conduct, the respondent revoked this prohibition?

9. Similarly, worded clauses fell for consideration over several years before the Supreme Court.

10. The main question before the court was the meaning to be ascribed to the words "or in any other respect whatsoever".

11. In State of U.P. v. Harish Chandra and Co with a connected matter, reported in 1999 (1) SCC 63 the contract term was as follows:
"1.9 No claim for delayed payment due to dispute etc. - No claim for interest or damages will be entertained by the Government with respect to any moneys or balances which may be lying with the Government owing to any dispute, difference; or misunderstanding between the Engineer - in - Charge in marking periodical or final payments or in any other respect whatsoever."
The view expressed by Mr. Justice Majumdar was:
"10.