In Brief
The Supreme Court addressed whether an arbitrator can grant post-award interest only on the principal amount rather than on the aggregate of principal and pre-award interest under Section 31(7)(b) of the Arbitration and Conciliation Act, 1996. The case arose from a bill-discounting agreement dispute where the arbitrator had awarded 18% post-award interest only on Rs. 5,00,32,656 (principal), not on the pre-award interest. The Court held that the arbitrator has inherent discretion to award post-award interest on the whole or any part of the sum awarded, provided the discretion is exercised reasonably and in good faith. The statutory phrase 'unless the award otherwise directs' qualifies only the interest rate, not the sum. The Court dismissed the appeal, upholding the arbitrator's award.
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