New Delhi, Dec. 6 -- The Supreme Court has upheld an arbitral award enforcing a 36 percent annual interest rate on British Physical Laboratories (BPL) Limited's dues to Morgan Securities and Credits Pvt Ltd, ruling that commercial entities cannot challenge interest rates they willingly accepted in a contract.

A Bench of Justice JB Pardiwala and Justice Sandeep Mehta dismissed BPL's appeals, holding that once parties mutually agree to an interest rate, they are strictly bound by those terms.

The Court said the arbitral tribunal and the Delhi High Court were correct in permitting monthly compounding as specified in the agreement. "A borrower cannot later call the rate unconscionable or contrary to public policy after availing the facility...