#Compound Interest

Bombay High Court rules that arbitral awards must strictly adhere to contractual interest rate clauses under Section 31(7)(a) of the Arbitration Act. The court set aside an award granting 18% compounded interest, remanding the dispute for fresh arbitration, reinforcing that arbitrators cannot override agreed terms even under judicial review.

Gauhati HC clarifies that interest under Section 16 of the MSME Act must be calculated monthly at three times the RBI rate prevailing at the end of each month, not a fixed rate from the appointed day. The ruling eliminates the need for prior conciliation for repeated claims, strengthening MSMEs' recovery rights against delayed payments.

The Madhya Pradesh High Court has ordered the Ujjain Municipal Corporation to pay Rs.14.46 lakh gratuity to a widow, along with 15% compound interest, after the employer failed to execute a final order issued under the Payment of Gratuity Act. This ruling reinforces that statutory gratuity awards, once final, are enforceable as debts with compounded penalties for state delay - setting a critical precedent for legal heirs of deceased employees.