The words, “unless otherwise agreed by the parties” occurs at the beginning of clause (a) qualifying the entire provision -- However, in clause (b), the words, “unless the award otherwise directs” occurs after the words ‘a sum directed to be paid by an arbitral award shall’ and before the words ‘carry interest at the rate of eighteen per cent” -- Thereby, those words only qualify the rate of post-award interest. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 31(7)(a)(b).

(SC) Decided on : 01.09.2022

Pre-award interest – Discretion of Arbitrator -- Section 31(7)(a) confers a wide discretion upon the arbitrator in regard to the grant of pre-award interest -- When a discretion has been conferred on the arbitrator in regard to the grant of pre-award interest, it would be against the grain of statutory interpretation to presuppose that the legislative intent was to reduce the discretionary power of the arbitrator for the grant of post-award interest under clause (b) -- Clause (b) only contemplates a situation where the arbitration award is silent on post-award interest, in which event the award-holder is entitled to a post-award interest of eighteen percent.

(SC) Decided on : 01.09.2022

Arbitration award -- Discretion of Arbitrator -- Clause (b) does not fetter the discretion of the arbitrator to grant post-award interest -- It only contemplates a situation in which the discretion is not exercised by the arbitrator -- Therefore, the observations Hyder Consulting’s case (2013) 2 SCC 719 on the meaning of ‘sum’ will not restrict the discretion of the arbitrator to grant post-award interest -- There is nothing in the provision which restricts the discretion of the arbitrator for the grant of post-award interest which the arbitrator otherwise holds inherent to their authority.

(SC) Decided on : 01.09.2022