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

An award dated 1 March directs Gupta Engineering Ltd to pay Rs 5,00,000 to Mehta Infra Ltd. The award is silent on post-award interest. Under Section 31(7)(b), what is the position on the sum from the date of award to the date of payment?

Unless the award directs otherwise, the awarded sum carries interest from the date of award to the date of payment at two per cent higher than the current rate of interest prevalent on the date of award, as defined in the Interest Act, 1978.

  1. ANo interest is payable because the award is silent
  2. BInterest is payable at the rate of two per cent higher than the current rate of interest prevalent on the date of awardCorrect
  3. CInterest is payable at the current rate of interest with no addition
  4. DInterest is payable only if the parties apply to the court within 30 days

Explanation

Section 31(7)(b) provides that, unless the award otherwise directs, a sum directed to be paid carries interest at two per cent higher than the current rate prevalent on the date of award, from award to payment. Silence in the award triggers this default. Option C omits the 2 per cent addition.

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