An arbitral tribunal has the discretion to award future interest in variance with the interest as specified under Section 31(7)(b) of the Arbitration and Conciliation Act, 1996. If the award is silent as to future interest, it would nonetheless be payable on the sums awarded, including pre-award interest if awarded by the tribunal. However, if the award indicates the tribunal's decision not to award future interest on pre-award interest, the respondent cannot be compelled to pay the sum.

VIBHU BAKHRU, J.

1. The above captioned petition has been filed for enforcement of an arbitral award dated 10.04.2012. According to the Judgment Debtor (hereafter 'NHAI'), it has duly satisfied the award as it has paid all sums awarded to the Decree Holder (hereafter 'BMS'). However, BMS claims that it is also entitled to future interest on the pre-award interest awarded by the arbitral tribunal. Thus, the only question that remains to be considered in this petition is whether the BMS is entitled to future interests on the pre-award interest awarded by the arbitral tribunal, in terms of Section 31 (7) (b) of the Arbitration and Conciliation Act, 1996 (hereafter 'the Act').

2. BMS had raised various claims before the arbitral tribunal which were considered under seven broad heads -Claim Nos. 1 to 7. Claim No. 6 was for pre-award interest -both pre arbitration and pendente lite interest. Claim No.7 consisted of BMS's claims on two counts; first, on account of future interest and second, on account of costs. BMS had claimed future interest on all claims (Claim Nos. 1 to 6) at the rate of 18% per annum. The arbitral tribunal considered the aforesaid claim and awarded future interest at the rate of 12% per annum from the date of award to the date of receipt of payment on the amounts awarded against Claim Nos. 1 to 5; it did not award any future interest on pre-award interest, that is, amounts awarded against claim no.6.

3.The relevant extracts of the arbitral award indicating the rival submissions and the arbitral tribunal’s conclusion in respect of Claim No. 7 are set out below:-

“Claim No.7 : Future interest on the claims 1 to 6 @ 18% p.a. from the date of award till the date of realization and Cost of Arbitration.

Claimant’s Submissions:

7.1.1 The claimant claims future interest on the aforesaid amounts of Claim Nos. 1 to 6 @ 18% p.a.

7.1.2. It is for the various neglect and breaches on the part of the Respondent and the Engineer that the Claimant has been unnecessarily dragged into Arbitration and had to incur huge expenditure on counsel, Consultant and ongoing arbitration proceedings. At present the costs have been tentatively valued at Rs. 1,00,00,000/-(Rupees one crore only).

The Claimant crave leave to reassess and revalue the costs during the Arbitral Proceedings.

Respondent’s Submissions:

7.2.1 In the light of submissions made in reply to each claim from claim 1 to 5, it is submitted that when the Claimant is not entitled to the claim raised, the question of any interest thereupon does not arise. It is denied that the for the various neglect and breaches on the part of the Respondent and the Engineer, the Claimant has been unnecessarily dragged into arbitration and has incurred huge expenditure on counsels, consultants and on ongoing arbitration proceedings. It is further denied that Claimant is entitled to any cost.

AT’s Analysis and Findings on claim No.7:

7.3.1 The Respondent is given 60 days time to make payment of the awarded amount failing which the Claimant will be entitled to interest on the awarded amounts against claim Nos. 1 to 5 @ 12% from the date of the award to the date of receipt of payment by the Claimant from the Respondent.

7.3.2 Each party to bear its own costs.”

4. The arbitral tribunal has also summarized the award as under :-

“SUMMARY OF AWARD

Sl. No.	Claim No.	Claim Amount (Rs.)	Award Amount (Rs.)
1.	2	3	4
1.	1	48,80,000/-	48,80,000/-
2.	2(i)	30,74,220/-	10,43,313/-
3.	2(ii)	6,06,633/-	6,06,633/-
4.	2(iii)	29,81,439/-	20,19,637/-
5.	2(iv)	6,81,756/-	NIL
6.	2(v)	14,13,561/-	11,08,232/-
7.	3	32,61,761/-	11,67,157/-
8.	4(i)	95,41,021/-	NIL
9.	4(ii)	48,89,137/-	NIL
10.	4(iii)	1,09,57,640/-	31,78,878/-
11.	4(iv)	33,38,956/-	33,38,956/-
12.	4(v)	41,70,338/-	NIL
13.	4(vi)	9,11,974/-	8,83,593/-
14.