The Supreme Court has ruled that an arbitral tribunal cannot award pre-reference interest when the parties’ contract expressly excludes such claims.
In North Eastern Electric Power Corporation v Astra Construction, 2026 INSC 1036, a contractor had received ₹3.30 crore for delayed public works, together with pre-reference interest at 12 per cent. The court read Clause 54 of the General Conditions of Contract as barring interest both on money withheld because of a dispute and on delayed payments.
By granting pre-reference interest despite that clause, the tribunal exceeded the authority conferred by the agreement. The Supreme Court restored the Commercial Court’s removal of that component and reversed the Meghalaya High Court on the point. The decision reinforces a central limit of arbitral power — tribunals derive jurisdiction from the contract and cannot grant relief the parties have expressly excluded.
