No-Interest Clause Ending With 'Or Otherwise' Bars Pre-Award Interest in Arbitration: Supreme Court

NBCC sub-contracted flooring and cladding works at Vashi Railway Station to the appellant in 1991 and terminated the contract in 1992 (para 3). In 2016 the Arbitrator held the termination wrongful, allowed several claims, rejected NBCC's counter-claims and awarded 10% interest from 22.09.1992 until payment (para 3). The Single Judge upheld the substantive claims under Section 34 but set aside pre-reference and pendente lite interest because Clause 26 of the contract barred interest, relying on Sayeed Ahmed (para 3). The Division Bench dismissed the Section 37 appeal, treating "or otherwise" as analogous to "or any other respect whatsoever" (paras 2-3).

Under Section 31(7)(a), read with Section 28(3), the tribunal's power to award interest for the pre-award period, covering pre-reference and pendente lite periods, is subject to "Unless otherwise agreed by the parties" (para 9). Where parties agree that no interest is payable, the arbitrator, a creature of the contract, cannot award it (paras 10, 18). Ejusdem generis applies only where the preceding words form a genus; disjunctive phrases are examined independently (para 12). Clause 26 lists separate events, held-up balance payments or deposits, delay in monthly or final payments, or otherwise, which form no single narrow genus; "or otherwise" is residuary, Lilavati Bai treats such words as words of extension, and reading them down would rewrite the contract (paras 13-14). ONGC v. G&T Beckfield concerned a narrow clause without residuary words; this clause stands on the same footing as the clauses in Sayeed Ahmed and Jaiprakash Associates (paras 15-16). Post-award interest under Section 31(7)(b) is not subject to the contract and rightly survived (para 17).