Summary
The arbitrator’s 18% post-award interest was restored. Arbitration commenced in 1999 under the 1996 Act despite the earlier contract date, so the Uttar Pradesh amendment to the repealed 1940 Act could not justify reducing interest to 6%. The applicable pre-2015 version of section 31(7)(b) prescribed 18% unless the award directed otherwise, and the award had followed that provision.
Issues
- Whether the State amendment to the repealed arbitration legislation governed interest in proceedings commenced under the 1996 Act.
- Whether the reduction of post-award interest was justified.
Provisions considered
- Section 31(7)(b), before the 2015 amendment, Arbitration and Conciliation Act, 1996The applicable statutory post-award rate was 18% unless the award otherwise directed; the arbitrator’s award conformed to it. (¶ 10–12)
Held
- The Uttar Pradesh provision amended the First Schedule to the 1940 Act. It had no application to arbitration commenced after the 1996 Act came into force and conducted under that enactment. (¶¶ 9, 11–12)
- The agreement’s earlier date did not change the governing legislation where proceedings admittedly commenced on 27 October 1999 under the 1996 Act. (¶ 12)
- Under the applicable unamended section 31(7)(b), the awarded sum carried 18% annual interest from award to payment unless otherwise directed. The courts below could not substitute 6% by invoking the obsolete State provision. (¶ 10–13)
Result
Appeal allowed; High Court and District Judge orders set aside only as to the interest reduction. Arbitrator’s post-award interest under section 31(7)(b) restored. No costs.