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CS Professional · Arbitration, Mediation and Conciliation · Preparation and Execution of Arbitral Award

A tribunal awards Rs 40,00,000 to Veena Constructions against Omkar Infra. The award is silent on post-award interest and the parties have not agreed otherwise. On the date of award the current rate of interest under the Interest Act, 1978 is 9% per annum. What interest applies from the date of award to the date of payment?

Interest runs at 11% per annum. Under Section 31(7)(b), unless the award directs otherwise, the awarded sum carries interest at two per cent above the current rate prevalent on the date of award, so 9% plus 2% gives 11% from award to payment.

  1. ANo interest, because the award is silent
  2. B9% per annum
  3. C11% per annumCorrect
  4. D2% per annum

Explanation

Section 31(7)(b) provides that, unless the award otherwise directs, a sum awarded carries interest at two per cent higher than the current rate prevalent on the date of award, from award to payment. So 9% + 2% = 11%. Choosing 9% misses the 2% uplift; 2% alone uses the wrong base.

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