Future interest on an arbitral award must be calculated on the total sum directed to be paid, including both principal and interest components. Liability for such interest accrues starting from the day following the award date if the payment is not satisfied within the tribunal-mandated grace period.

JUDGMENT

AMIT BANSAL, J.

1. The present petition has been filed under Section 36 of the Arbitration and Conciliation Act (‘Act’) seeking enforcement of the final award dated 7th November, 2022 (‘Award’) passed by an Arbitral Tribunal comprising a Sole Arbitrator (‘Arbitral Tribunal’).

2. RCCIVL-LITL (JV), the claimant in the arbitration proceedings, is hereinafter referred to as the ‘decree holder’ and the Union of India, the respondent in the arbitration proceedings, is hereinafter referred to as the ‘judgment debtor’.

3. The Arbitral Tribunal allowed certain claims of the decree holder along with interest and costs of arbitration. The counter claims filed by the respondent were rejected by the Arbitral Tribunal.

4. The judgment debtor filed a petition under Section 34 of the Act seeking setting aside of the Award, which was dismissed on 29th May, 2023. An appeal filed against the said dismissal order under Section 37 of the Act was also dismissed by the Division Bench on 8th July, 2024. Subsequently, an SLP filed by the judgment debtor was also dismissed on 20th December, 2024. Therefore, the Award has attained finality.

5. The judgment debtor deposited a sum of ₹17,79,65,167.54 with the Registrar General of this Court on 7th February, 2024, which has since been released in the favour of decree holder.

6. The decree holder claims that it is entitled to sums beyond the deposited amount before this Court whereas judgment debtor opposes the same. In these circumstances, both sides were directed to file their respective calculation details.

7. This Court vide order dated 9th July, 2025 directed that the discrepancies in the calculation table be mutually reconciled by the officials of the parties. However, the differences with regard to the calculation details could not be reconciled. At the hearing on 11th November, 2025, it was noted that the disputes between the parties only persist in respect of claim no. 2(K), claim no.2(L), claim no.2(O), claim no.2(N) and the future interest.

8. Submissions on behalf of counsel were heard on 9th December, 2023 and the judgment was reserved.

9. At first, I will consider the differences between the parties in relation to claim nos.2(K) and 2(L). For the ease of reference, the said claims are set out below:-

“Claim No. 2 (K): Ser No 11 of “Disputed” part of Final Bill:

Reimbursement of compensation on Short/ Less payment of RARs amount amounting to Rs.5,77,19,935.40

Claim No. 2 (L): Ser No 12 of “Disputed” part of Final Bill:

Reimbursement of compensation on delayed payment of RARs amounting to Rs 3,24,69,263.12”

10. In respect of the aforesaid claims, the Arbitral Tribunal held that the claimant (decree holder) did not bring any evidence to prove that it had actually suffered any losses. However, it was noted that there was unjustifiable delay in payments and therefore, the decree holder would be entitled to interest.

11. Accordingly, the Arbitral Tribunal awarded interest at the rate of 8% on the delayed payments. The operative paragraph 144 of the Award is set out below:-

“144. It is noted that except for the calculations referred to in Appendix ‘A’, the Claimant has not brought on record any evidence to prove that it had actually suffered any losses to be entitled to justify its claims under Section 73 of the Contract Act. However, unjustifiably delayed payments whi