In Brief
This case addresses the proper interpretation of Section 31(7) of the Arbitration and Conciliation Act, 1996 regarding interest awards. The Supreme Court held that an arbitral tribunal may award interest for the period from date of cause of action to date of award in multiple sub-periods with different rates (pre-reference and pendente lite), and that post-award interest can be computed on the sum inclusive of pre-award interest. The Court clarified that this is not compound interest but the statutory effect of Section 31(7)(b). The judgment set aside the High Court's Division Bench order which had restricted interest to only two undifferentiated periods.
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