The main legal point established is that interest on the interest component and the interest rate should be determined in accordance with the statutory provisions of the Arbitration and Conciliation Act, 1996.

ORDER

1. Leave granted.

2. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court of Punjab and Haryana at Chandigarh in FAO Nos. 2345 and 4000 of 2006 by which the High Court has modified the award passed by the sole Arbitrator to the extent awarding the interest @ 18% post-Award only upon the principal amount awarded and even reducing the rate of interest from 18% p.a. from 9% p.a., the original Claimant-IOC has preferred the present Appeals.

3. The issue involved in the present Appeals lies in a very narrow compass. The dispute was referred to the sole Arbitrator. The appellant herein-original Claimant submitted the claim and even the counter-claim was submitted on behalf of the respondent. Ultimately, the learned Arbitrator awarded a sum of Rs.3,08,32,448.30 towards the principal claim and Rs. 2,27,58,137.08 towards the interest. The learned Arbitrator awarded the interest from the date of the claim till the award @ 18% p.a. Thus, the learned Arbitrator awarded a total sum of Rs.5,35,91,262.00. In appeal by the respondent, the High Court has observed and held that the appellant-original Claimant shall be entitled to the interest only upon the principal amount so awarded and shall not be entitled to the interest on interest that is interest @ 18% p.a. on Rs. 2,27,58,137.08 (the interest component). The High Court, by the impugned order, has also reduced the rate of interest from 18% p. a. to 9% p. a. even with respect to the principal amount so awarded by the Arbitral Tribunal.

4. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court in not awarding the interest @ 18% p.a. on the interest component of Rs. 2,27,58,137.08 from the date of award till realization and even awarding the interest @ 9% upon the principal amount awarded, the original Claimant - IOC has preferred the present Appeals.

5. We have heard Mr. V.N. Koura, learned counsel appearing for the appellant-IOC and Mr. Dhaval Deshpande, learned counsel appearing for the respondent-liquidator.

6. The issue whether the learned Arbitrator could have awarded the interest on the interest of Rs. 2,27,58,137.08 from the date of award till realization and whether the same can be said to be interest on interest is now not res integra in view of the decision of this Court in the case of Hyder Consulting (UK) Limited vs. Governor, State of Orissa, (2015) 2 SCC 189. In paras 27-32, it is observed and held as under:-

"27. Section 31(7)(a) employs the words "...the Arbitral Tribunal may include in the sum for which the award is made interest...". The words "include in the sum" are of utmost importance. This would mean that pre-award interest is not independent of the "sum" awarded. If in case, the Arbitral Tribunal decides to award interest at the time of making the award, the interest component will not be awarded separately but it shall become part and parcel of the award. An award is thus made in respect of a "sum" which includes within the "sum" component of interest, if awarded.

28. Therefore, for the purposes of an award, there is no distinction between a "sum" with interest, and a "sum" without interest. Once the interest is "included in the sum" for which the award is made, the original sum and the interest component cannot be segregated and be seen independent of each other. The interest component then loses its character of an "interest" and takes the colour of "sum" for which the award is made.

29. There may arise a situation where, the Arbitral Tribunal may not award any amount towards principal claim but award only "interest". This award of interest would itself then become the "sum" for which an award is made under Section 31(7)(a) of the Act. Thus, in a pre-award stage, the legislation seeks to make no distinction between the sum awarded and the interest component in it.

30. Therefore, I am inclined to hold that the amount awarded under Section 31(7)(a) of the Act, whether with interest or