Back
PAMIDIGHANTAM SRI NARASIMHA, SANDEEP MEHTA
R. P. Garg – Appellant
Versus
Chief General Manager, Telecom Department – Respondent
Key Points: - Post-award interest shall be payable on sums directed by an arbitral award; rate can be provided by the Arbitrator and in default statutory prescription will apply. (!) - Post-award interest is not subject to contract between the parties; a contractual prohibition does not bar post-award interest. (!) (!) - Section 31(7)(a) governs pre-award interest, which is subject to the arbitration agreement unless otherwise agreed by the parties. (!) (!) - Section 31(7)(b) provides post-award interest on sums directed to be paid, with the rate determined by the arbitrator or by statutory prescription if not specified; it is not contractually overridable. (!) (!) - The award in question should carry post-award interest from the date of the award to realization, at the rate determined (default 18% per the appellate decision). (!) (!) - High Court’s interpretation that contract prohibition defeats post-award interest is erroneous; post-award interest depends on statutory framework, not contract. (!) (!) - The decision restores the appellate court’s grant of 18% post-award interest and reverses the High Court’s revision. (!) - The parties shall bear their own costs. (!)
JUDGMENT :
PAMIDIGHANTAM SRI NARASIMHA, J.
1. Leave granted.
2. The short question before us is whether the appellant is entitled to post award interest on the sum awarded by the Arbitrator. The Arbitrator denied payment of such interest under a misplaced impression that the contract between the parties prohibited it. The executing Court1[Order in M.A No. 19 of 2001 dated 10.10.2002.] affirmed the finding of the Arbitrator and rejected the prayer. However, allowing the appeal, the District Court2[Order passed by the District Judge in Civil Appeal no.86 of 11.11.2002 dated 04.03.2003] held that the appellant will be entitled to post award interest. By the order impugned before us, the High Court3[Order dated 14.05.2019 passed by the High Court of Punjab and Haryana in Civil Revision No. 2561 of 2003] allowed the revision and set aside the District Court order while holding that the contract between the parties did not permit grant of post award interest.
2.1 For the reasons to follow, while allowing the appeal we have held that as this is a case arising out of the Arbitration and Conciliation Act, 19964[Hereinafter referred to as ‘the Act’], by operation of Section 31(7)(b), the sum dir
Post award interest – Granting post-award interest is not subject to contract between parties – Rate of interest can be provided by Arbitrator and in default statutory prescription will apply.
Arbitral awards inherently carry a statutory interest rate of 18% for post-award periods, ensuring prompt compliance regardless of parties' prior decisions.
Arbitrator has discretion to grant post-award interest – If Arbitrator does not grant post-award interest, award holder is entitled to post-award interest at eighteen percent.
The Arbitral Award holds primacy in determining post-award interest, and interest on costs is to be granted by the Arbitral Tribunal.
(1) Appeal against Arbitral Award – Grant of post-award interest is conditional in nature and operates as a deterrent against delayed payment, rather than as an automatic or punitive imposition of po....
Arbitral Awards prevail over statutory default provisions regarding interest unless explicitly stated otherwise in the Award.
Arbitral Tribunal's power to grant interest for the period post award till realization is subject to the discretion only in respect to the rate as it is the mandate of the law to grant such interest ....
An arbitral award's stipulations on interest must be strictly enforced as per the parties' agreement, disallowing claims for compound interest unless explicitly provided, reinforcing party autonomy i....
The Arbitral Tribunal's authority to award interest is governed by the arbitration agreement, with specific provisions for pre-award and post-award interest under the Arbitration Act.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
