26 October 2021 | National Thermal Power Corporation Limited v. Patel Engineering Ltd. | OMP (COMM) 504 of 2020 Vibhu Bakhru J | Delhi High Court | 2021 SCC OnLine Del 4827

A package of the hydroelectric project awarded to the respondent was later on scrapped. The respondent was awarded various claims in arbitration relating to idle charges.

Several challenges were made to the award and most of them were rejected because the issues raised were covered by another judgment between the parties in OMP (Comm.) No. 156 of 2018. The remaining question was of interest. PEL had claimed pre-suit, pendente lite and future interest at the rate of 18% per annum. The tribunal granted interest at the rate of 12% per from a specified date till the award and future interest till date of the payment.

The grant of interest was disputed on the ground that Clauses 77 and 78 of the Conditions of Particular Application (COPA) did not permit it. Clause 78 prohibited interest on money lying with NTPC or delay in clearing the payments or in any other respect whatsoever.

Bakhru J noted that the issue (in particular the meaning of the phrase italicized above) was discussed in several judgments.

And, in view of Supreme Court’s Reliance Cellulose Products Ltd. v. Oil and Natural Gas Corporation Ltd. (2018) 9 SCC 266; Jai Prakash Associates Ltd. (2019) 17 SCC 786, the question whether Clause 78 of the COPA had to be interpreted in wide terms, is no longer res integra.

Hence, the pre-award interest was held prohibited by the terms of the contract, and set aside.

Read the judgment here.