Skip to content

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

Rao Textiles Ltd and Sundaram Dyes Pvt Ltd refer a payment dispute to a sole arbitrator. Their arbitration agreement is silent on interest. The tribunal awards Rs 10,00,000 to Rao Textiles. Under Section 31(7)(a), which statement is correct about interest for the period from the date the cause of action arose to the date of the award?

Where the parties have not agreed otherwise, the tribunal may include interest at a reasonable rate it deems fit, on all or part of the awarded sum, for all or part of the period from the cause of action to the award date. The rate is discretionary.

  1. AThe tribunal may include interest at a rate it deems reasonable on the whole or any part of the sum for the whole or any part of that periodCorrect
  2. BThe tribunal may award interest only from the date of the award, never for the earlier period
  3. CThe tribunal must award interest at a fixed statutory rate on the entire sum for the entire period
  4. DThe tribunal can award interest only if the court approves the rate

Explanation

Section 31(7)(a) allows the tribunal, unless the parties have agreed otherwise, to include interest at a rate it deems reasonable on the whole or any part of the money for the whole or any part of the pre-award period. The agreement is silent, so the discretion is available. The statute does not fix a rate for this period or require court approval.

Did you get it right without looking?

One question tells you little. A timed set on Preparation and Execution of Arbitral Award shows your real accuracy, how long you take and where you lose marks.

Practise Preparation and Execution of Arbitral AwardFree diagnostic mock

More Preparation and Execution of Arbitral Award questions