The Supreme Court has confirmed an arbitral award directing BPL to pay 36% annual interest with monthly compounding, ruling that parties are bound by the contract they sign. The Court said high interest in commercial deals is not “unconscionable” when agreed between equal parties.
Justice KV Viswanathan of the Supreme Court dissented, stating that courts lack the authority to modify arbitral awards under Sections 34 and 37 of the Arbitration and Conciliation Act. He emphasized that Article 142 cannot supplant substantive law, opposing the majority view that allowed for limited modifications, warning of potential complications in international enforcement.
