Ramachandran Nair, J.

The short question that arises in this appeal is whether the appellant is entitled for grant of interest for the period from 22.2.2002 till 8.3.2005 which, even though was awarded by the Arbitrator, the same has been deleted by the learned Addl. District Judge. The learned Judge has upheld the grant of pendente lite interest at 10% but the rate fixed at 12% per annum as future interest has been modified to 10%.

2. We heard learned counsel for the appellant Shri Meijo Kurian and Shri S. Krishnamoorthy, learned Standing Counsel for the respondent.

3. Since the only issue considered by the learned Addl. District Judge is with regard to the interest granted, as the challenge against the award was finally confined to the same, we need not elaborate the details concerning the claims and the award in favour of the appellant.

4. The appellant was engaged for construction of AED Hanger at INS Garuda, Naval Base, Kochi. The contract was entered into on 24.8.1989 and the date of completion of the work was 3.3.1991, which was extended till 29.3.1992. It appears that when 85% of the work was completed, the Hanger collapsed and according to the appellant, it was due to the defect in the design. The appellant was directed to carry out rehabilitation work. In the meanwhile, according to the appellant, he was directed to wait till the design was examined by the Defence Directorate of designs at Pune. The original design was altered after a lapse of one year and he was directed to reconstruct the Hanger as per the revised design. According to the appellant, even though the work was completed in all respects, the respondent refused to make payment towards the value of the works done. At the time when the Hanger collapsed in March 1992, payments for works till that day was outstanding. The admitted amounts were also not paid according to the appellant, by some pretext or the other. A notice was sent by the appellant on 28.9.2001 raising various claims. Clause 70 of the General Conditions of Contract provides for reference of disputes to the arbitrator to be appointed by the Engineer-in-Chief, Army Headquarters, New Delhi. This provision was invoked by the appellant by notice dated 21.2.2002. After waiting for three months the appellant approached this Court in A.R. No.17/2002 for appointment of an Arbitrator. It was ordered by this Court and the sole Arbitrator, viz. Brigadier K. John Kuruvila, Retd. Chief Engineer, MES, Mumbai was appointed. This was challenged in a writ petition by the respondent wherein this Court directed the parties to opt the agreed procedure. Thereafter, one Shri D.K. Sarma, Chief Engineer (Designs) Southern Command, Headquarters, Pune was appointed as the sole arbitrator. An award was passed which was challenged under Section 34 of the Arbitration and Conciliation Act, 1996 (for short "the Act"). In appeal before this Court, on the finding that the Union of India was not given an opportunity to examine the expert examiner as witness, the award was set aside and the Engineer-in-Chief was directed to appoint an arbitrator to conduct denovo arbitration. Accordingly, a new arbitrator, Shri Satish Chander, Chief Engineer (Contracts) Panel of Arbitrators, Chandigarh - Chandi Mandir, Punjab was appointed and the final award was passed on 22.8.2013. This was challenged under Section 34 of the Act by the respondent in which the impugned judgment has been passed.

5. At the outset, learned counsel for the appellant submitted that the power of the arbitrator to award interest is clear from Section 31(7) (a) of the Act which alone has been invoked. Unlike the Arbitration Act, 1940, in the light of the specific statutory provision in the present Act, the Arbitrator can award interest for the period arising from the date of accrual of cause of action till he enters upon reference, for the period from the d