Morgan Securities And Credits Pvt. Ltd. Versus Videocon Industries Ltd

Morgan Securities And Credits Pvt. Ltd. Versus Videocon Industries Ltd

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

1

Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

Civil Appeal No. 5437 of 2022

Morgan Securities And Credits Pvt. Ltd. .... Appellant

Versus

Videocon Industries Ltd. ....Respondent

J U D G M E N T

Dr Dhananjaya Y Chandrachud, J

1 This appeal arises from a judgment dated 26 February 2020 of the High

Court of Delhi by which the appeal under Section 37 of the Arbitration and

Conciliation Act 19961 against a judgment of the Single Judge dated 7 February

2019 has been dismissed. At the core, the issue is whether the arbitrator has the

discretion to grant post-award interest only on the principal sum due under

Section 31(7)(b) of the Act.

1

“The Act”

2

Facts

2 On 27 January 2003, the appellant and the respondent entered into an

agreement under which the respondent availed of bill discounting facilities from

the appellant. The appellant disbursed Rs. 5,00,32,656 pursuant to the

agreement. The dues remained unpaid. The appellant issued a notice to the

respondent on 10 January 2006 demanding the payment of the principal amount

of Rs. 5,00,32,656 as on 17 April 2003, which is the date of default, along with an

overdue interest. Since the respondent did not pay the amount as demanded, the

appellant issued a notice on 31 January 2006, invoking the arbitration clause of

the agreement.

3 The sole arbitrator rendered an arbitral award in favour of the appellant on

1 March 2013. The award was corrected on 29 April 2013 and decrees the claim

of the appellant in the amount of Rs. 5,00,32,656. Interest at the rate of (i) twenty

one percent per annum has been granted from the date of default to the date of

the demand notice; (ii) thirty six percent per annum with monthly rests from the

date of the demand notice to the date of award (“pre-award interest”); and (iii)

eighteen percent per annum on the principal amount of Rs. 5,00,32,656 from the

date of award to the date of payment (“post-award interest”). The relevant extract

of the award is set out below:

“ In view of the findings of the Tribunal above,

Respondent No. 2 is liable to pay a sum of Rs. 5,00,32,

656 (Rupees five crores thirty two thousand six hundred

and fifty six only) to the Claimant along with interest at

21% p.a till the date of demand notice. After the date of

the demand notice, i.e 10.01.2006, the Claimant is

entitled to receive interest at the rate 36% p.a with

monthly rests. Further, in terms of the aforesaid

decision in S.L Arora, the Claimant is entitled to

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receive post- award interest at the rate of 18% p.a

only on the principal amount of Rs 5,00,32,656/”

 (emphasis

supplied)

4 The appellant challenged the arbitral award 2

in a petition under Section 34

before the Delhi High Court raising objections on the grant of post-award and preaward interest. The respondent also filed a petition3

. The appellant urged that

the post-award interest of eighteen percent per annum should be granted on the

total sum awarded, inclusive both of principal and pre-award interest. By a

judgment dated 7 February 2019, the Single Judge of the Delhi High Court

dismissed the petition filed by the appellant on the grant of post-award interest.

The Single Judge held that the Arbitrator had in his discretion restricted the postaward interest to the principal amount and that the court would not interfere with

the exercise of discretion:

The appeal against the judgment of the Single Judge was

dismissed by the Division Bench of the High Court by a

judgment dated 26 February 2020. The counsel for the

appellant before the High Court placed reliance on the

decision of a three-Judge Bench of this Court in Hyder

Consulting (UK) Limited v. Governor, State of Orissa4

and contended that post-award interest ought to be

granted on the sum directed to be paid under the arbitral

award, which also includes the pre-award interest.

Counsel for the respondent contended that reliance ought

not to be placed on the judgment in Hyder Consulting

(supra) since the decision in State of Haryana v. SL

Arora5 was the applicable law when the petition under

Section 34 was instituted. The Division Bench of the High

Court observed that the judgment in Hyder Consulting

(supra) clarifies that when the arbitral award is silent on

post-award interest, it would be payable on the ‘sum’

awarded, which would include both the principal and the

pre-award interest. The Division Bench held that in this

2 OMP No. 972 of 2013

3 OMP 665 of 2013

4

(2015) 2 SCC 189

5

(2010) 3 SCC 690

4

case since the arbitral award is not silent on post-award

interest, the provisions of Section 31(7)(b) of the Act

would not be applicable.

Both the Single Judge and the Division Bench of the Delhi High Court also

decided on the other objections of the appellant and the respondent.

5 Proceedings under Article 136 of the Constitution were initiated for

challenging the judgment of the Division Bench of the Delhi High Court dated 26

February 2020. On 16 July 2021, this Court issued notice confined to the issue of

post-award interest. The order reads as follows:

“ 1 Issue notice confined to the post award interest.

We are not entertaining the Special Leave Petition as

regards the award of interest prior to the date of the

award.

2 The Arbitrator, in awarding interest at the rate of

18% post award on the principal sum, based the award

on the decision in State of Haryana v SL Arora. The

decision in S L Arora was overruled in Hyder

Consulting (UK) Ltd. v. State of Orissa.

3. In view of the above premises, we issue notice

confined to the above issue returnable in eight weeks.”

Submissions

6 Mr. Abhishek Puri, learned counsel appearing for the appellant made the

following submissions:

(i) In view of the provisions of Section 31(7) of the Act and the judgment of

this Court in Hyder Consulting (supra), if pre-award interest is

awarded on the principal sum, the aggregate of the principal and the

pre-award interest is the ‘sum’ on which post-award interest must be

granted;

(ii) According to the majority opinion in Hyder Consulting (supra), once

pre-award interest is granted on the principal sum under Section

31(7)(a) of the Act, the interest award loses its character as interest

5

and takes the color of the awarded ‘sum’ for the purposes of postaward interest under Section 31(7)(b) of the Act;

(iii) The arbitral award is silent on post-award interest on the component of

interest. Therefore, the appellant is entitled to the statutory rate of

interest on the aggregate of the principal and pre-award interest under

Section 31(7)(b) of the Act;

(iv) Even according to the decision in SL Arora (supra), the discretion of

the arbitral tribunal under Section 31(7)(b) of the Act was only with

respect to the rate of the post-award interest. In this case, the arbitrator

has awarded post-award interest only on the principal sum solely in

view of the judgment in SL Arora (supra);

(v) The arbitrator only has the discretion to determine the rate post-award

interest. The Arbitrator does not have the discretion to determine the

‘sum’ on which the post-award interest is to be granted; and

(vi) The contention that Section 31(7)(b) of the Act would be inapplicable in

cases where the arbitrator has awarded post-award interest by

exercising discretion is not borne out of the decisions in SL Arora

(supra) or Hyder Consulting (supra).

7 Mr Nakul Dewan, learned senior counsel for the respondent made the

following submissions:

(i) Section 31(7)(b) is qualified by the phrase “unless the award

otherwise directs”. Therefore, Section 31(7)(b) would only be

applicable where an arbitral award is silent on the component of

post-award interest;

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(ii) Under Section 31(7)(b) of the Act, the arbitrator has the discretion to

(a) grant post-award interest; (b) determine the quantum over which

the post-award interest should be granted; and (c) determine the

rate at which the interest should be calculated; and

(iii) In Hyder Consulting (supra), a three-Judge Bench of this Court

overruled SL Arora (supra) to the extent that the latter decision held

that the arbitral tribunal does not have the power to award interest

over interest. However, in Hyder Consulting (supra), it was not

held that it is mandatory that the post-award interest ought to only

be granted on the aggregate of the principal and the pre-award

interest.

Analysis

8 Section 31 provides for the “form and content of arbitral award”. Subsection 7 of Section 31 deals with pre-award and post-award interest. Section

31(7)(a) provides for pre-award interest, that is for the period between the date

on which the cause of action arose and the date on which the award is made.

Section 31(7)(b) provides for post-award interest, between the date of award to

the date of payment. Section 31(7) reads as follows:

(7) (a) Unless otherwise agreed by the parties, where and

in so far as an arbitral award is for the payment of money,

the arbitral tribunal may include in the sum for which

the award is made interest, at such rate as it deems

reasonable, on the whole or any part of the money, for

the whole or any part of the period between the date on

which the cause of action arose and the date on which

the award is made;

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(b) A sum directed to be paid by an arbitral award

shall, unless the award otherwise directs, carry interest

at the rate of eighteen per centum per annum from the

date of the award to the date of payment.

 (emphasis supplied)

9 In SL Arora (supra) this court had to interpret the expression ‘sum’ in

Section 31(7). This Court framed the following issue:

“(i) Whether Section 31(7) of the Act authorises and

enables Arbitral Tribunals to award interest on interest

from the date of award?”

Justice R V Raveendran writing for a two-Judge Bench held that Section 31(7)

does not enable the arbitral tribunal to provide interest on interest from the date

of the award. While arriving at this conclusion, the court observed that:

(i) Section 31(7) does not make any reference to the payment of

compound interest or interest on interest. The phrase “sum directed to

be paid by the award” refers to the award of “sums on substantive

claims”, that is, the principal amount. In the absence of a provision

enabling the grant of compound interest, such a power cannot be read

into the provisions either for the pre-award period or for the post-award

period;

(ii) A high rate of interest at eighteen percent is statutorily recognised in

Section 31(7)(b) for the post-award period to deter the award-debtor

from delaying the payment of monies as directed in the award;

(iii) Section 31(7)(a) confers the arbitrator with the discretion to determine

the rate of interest, the period for which the interest is to be paid, and

the quantum on which interest is to be awarded. However, the

discretionary power of the arbitrator is subject to the contract between

8

the parties. Section 31(7)(b) provides the arbitrator the discretion to

award interest for the post-award period. The discretion is not subject

to any contract. If the arbitrator does not exercise the discretion by

awarding post-award interest, then the mandated interest of eighteen

percent shall be awarded; and

(iv) If the award provides interest at a specified rate till the date of payment,

then Section 31(7)(b) of the Act will not be invoked. Section 31(7)(b) will

be invoked only if the award is silent on the post-award interest.

10 A two-judge bench of this Court6

referred the correctness of the decision in

SL Arora (supra) to a three-Judge Bench. In Hyder Consulting (supra), a threeJudge Bench overruled the decision in SL Arora (supra). Three separate

judgments were authored. In order to determine the ratio decidendi in Hyder

Consulting (supra), it is necessary that all three opinions are carefully analysed.

Justice SA Bobde, observed that the view in SL Arora (supra) that pre-award

interest should not be included in the ‘sum’ for calculating post-award interest is

erroneous:

“ 2. It is not possible to agree with the conclusion in S.L.

Arora case that Section 31(7) of the Act does not require

that interest which accrues till the date of the award be

included in the ‘sum’ from the date of award for

calculating the post-award interest. In my humble view,

this conclusion does not seem to be in consonance with

the clear language of Section 31(7) of the Act.”

Referring to Section 31(7)(a), Justice Bobde observed that (i) since Parliament

has not qualified the phrase ‘sum’ with the word ‘principal’, (as in Section 34 of

the Code of Civil Procedure 1908) the word ‘sum’ only takes the meaning of ‘a

6 Hyder Consulting Ltd. v. State of Orissa, (2013) 2 SCC 719

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particular amount of money’; (ii) the ‘sum’ would include both principal and

interest; and (iii) when interest is directed to be paid on the principal under

Section 31(7)(a), the aggregate amount after merging pre-award interest and

the principal would be the ‘sum’, where the two components of principal and

interest would have lost their identities. The relevant observations are extracted

below:

7. Thus, when used as a noun, as it seems to have been

used in this provision, the word “sum” simply means “an

amount of money”; whatever it may include — “principal”

and “interest” or one of the two. Once the meaning of the

word “sum” is clear, the same meaning must be ascribed

to the word in clause (b) of sub-section (7) of Section 31

of the Act, where it provides that a sum directed to be

paid by an arbitral award “shall … carry interest …” from

the date of the award to the date of the payment i.e. postaward. In other words, what clause (b) of sub-section

(7) of Section 31 of the Act directs is that the “sum”,

which is directed to be paid by the award, whether

inclusive or exclusive of interest, shall carry interest

at the rate of eighteen per cent per annum for the

post-award period, unless otherwise ordered.

[…]

13. Thus, it is apparent that vide clause (a) of sub-section

(7) of Section 31 of the Act, Parliament intended that an

award for payment of money may be inclusive of interest,

and the “sum” of the principal amount plus interest may

be directed to be paid by the Arbitral Tribunal for the preaward period. Thereupon, the Arbitral Tribunal may

direct interest to be paid on such “sum” for the postaward period vide clause (b) of sub-section (7) of

Section 31 of the Act, at which stage the amount

would be the sum arrived at after the merging of

interest with the principal; the two components

having lost their separate identities.”

 (emphasis supplied)

10

11 Justice AM Sapre in his concurring opinion noted that while the grant of

pre-award interest is at the discretion of the arbitral tribunal; post-award interest

is mandated by the statute where the arbitrator only has the discretion to decide

the rate of interest. That is, if the arbitral tribunal has used its discretion to grant

post-award interest at a particular rate, then such rate as directed would prevail,

otherwise, the rate of interest mentioned in the statute would be applicable. The

relevant extract of the judgment reads as follows:

“26. […] Pre-award interest is at the discretion of the

Arbitral Tribunal, while the post-award interest on the

awarded sum is mandate of the statute—the only

difference being that of rate of interest to be awarded

by the Arbitral Tribunal. In other words, if the Arbitral

Tribunal has awarded post-award interest payable from

the date of award to the date of payment at a particular

rate in its discretion then it will prevail else the party will

be entitled to claim post-award interest on the awarded

sum at the statutory rate specified in clause (b) of Section

31(7) of the Act i.e. 18%. Thus, there is a clear distinction

in time period and the intended purpose of grant of

interest.”

 (emphasis supplied)

Justice Sapre agreed with Justice Bobde on the meaning of the expression ‘sum’

and held that once the interest is ‘included in the sum’, then the interest and the

principal component cannot be segregated :

“28. Therefore, for the purposes of an award, there is no

distinction between a “sum” with interest, and a “sum”

without interest. Once the interest is “included in the

sum” for which the award is made, the original sum

and the interest component cannot be segregated

and be seen independent of each other. The interest

component then loses its character of an “interest”

and takes the colour of “sum” for which the award is

made.

29. There may arise a situation where, the Arbitral

Tribunal may not award any amount towards principal

claim but award only “interest”. This award of interest

would itself then become the “sum” for which an award is

made under Section 31(7)(a) of the Act. Thus, in a pre-

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award stage, the legislation seeks to make no

distinction between the sum awarded and the interest

component in it.

[…]

31. […] Interest under clause (b) is granted on the

“sum” directed to be paid by an arbitral award

wherein the “sum” is nothing more than what is

arrived at under clause (a)”

 (emphasis

supplied)

12 The view of Chief Justice HL Dattu in his dissenting opinion was that :

(i) The phrase ‘sum’ in Section 31(7)(a) refers to ‘money’ in common

parlance. Section 31(7)(a) states that interest may be awarded on

the ‘sum’, which would mean the interest awarded on the money for

which the arbitral award is made. Therefore, sum refers to the

‘principal’ amount awarded;

(ii) The phrase ‘sum’ as used in clause (b) is used in the same context

as in clause (a). Therefore, the phrase ‘sum’ in clause (b) also

means the ‘principal’ amount; and

(iii) The words ‘unless the award otherwise directs” in Section 31(7) (b)

would mean that if the arbitral tribunal directs post-award interest to

be paid, then Section 31(7)(b) would be inapplicable. The corollary

is that even if the award directs that no post-award interest is to be

granted, clause (b) cannot be invoked. The observations in the

dissent are extracted below:

“ 81. […] The said clause uses the phrase “unless the award

otherwise directs”, which would mean that in the event the

Arbitral Tribunal, in its award, makes a provision for interest

to be imposed in this second stage as envisaged by subsection (7) of Section 31 of the 1996 Act, clause (b) would

12

become inapplicable. By the said award, the Arbitral Tribunal

has the power to impose an interest for the post-award

period which may be higher or lower than the rate as

prescribed under clause (b). Even if the award states that no

interest shall be imposed in the post-award period, clause

(b) cannot be invoked.

82. If the arbitral award is silent on the question of whether

there would be any post-award interest, only in that situation

could clause (b) be made applicable. In the said situation, it

would be mandatory as per law that the award could carry

interest at the rate of 18% per annum from the date of the

award to the date of payment. The term used in the given

clause is “shall”, therefore, if applicable, the imposition of

interest as per clause (b) would be mandatory.”

13 The contention of the respondent is that Section 31(7)(b) could be invoked

only when the arbitration award is silent on post-award interest. That is, if the

award does not make a specific provision for post-award interest, then in view of

Section 31(7)(b) of the Act, post-award interest of eighteen percent shall be paid

on the ‘sum’, for which purpose the ‘sum’ shall be the aggregate of the principal

and pre-award interest. The argument of Mr Nakul Dewan is that the arbitral

tribunal has the discretion to determine- a) whether post-award interest should be

granted; b) the ‘sum’ on which the post-award interest is to be granted; and c) the

rate of such interest.

14 The interpretation of Section 31(7)(b) has to focus on the meaning of two

phrases - first, the expression “sum”; and second, “unless the award otherwise

directs”. The phrase ‘sum’ has been interpreted in the opinion of Justice Bobde

and in the concurring opinion of Justice Sapre in Hyder Consulting (supra) to

mean the amount directed to be paid by an arbitral award as arrived in Section

31(7)(a), which would include the aggregate of the principal and the pre-award

interest. While Justice Sapre was of the view that the arbitrator only has the

discretion to determine the rate of post-award interest, Justice Bobde did not

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expressly discuss the ambit of discretion of the arbitrator while granting postaward interest. In Justice Bobde’s opinion, there was no discussion on whether

the arbitrator had the discretion to order post-award interest on a part of the ‘sum’

that was arrived under Section 31(7)(a).

15 On the interpretation of the words ‘unless the award otherwise directs’,

Justice Sapre interpreted them to mean that post-award interest is a statutory

mandate and that the arbitrator only has the discretion to determine the rate of

interest to be awarded. Justice Bobde did not specifically interpret the phrase

‘unless the award otherwise directs’. The learned Judge made a passing

reference to the phrase in paragraph 7 of the judgment, where he observed that

“In other words, what clause (b) of sub-Section (7) of Section 31 of the Act directs

is that the “sum”, which is directed to be paid by the award, whether inclusive or

exclusive of interest, shall carry interest at the rate of eighteen per cent per

annum for the post-award period, unless otherwise ordered.” However, in

paragraph 13 of the judgment, the learned Judge observed, “Thereupon the

Arbitral Tribunal may direct interest to be paid on such ‘sum’ for the post-award

period vide clause (b) of sub-section (7) of Section 31 of the Act, at which stage

the amount would be the sum arrived at after the merging of interest with the

principal; the two components having lost their separate identities.”

16 The use of the words ‘may direct interest to be made’ in paragraph 13 of

Justice Bobde’s opinion could be interpreted to mean either that the arbitrator has

the discretion to decide not to grant post-award interest or as recognising the

discretion of the arbitrator on whether to grant interest on the aggregate of the

principal and the pre-award interest. Nothing in the observations extracted above

14

limit the discretion of the arbitrator in awarding post-award interest. This

conclusion is further fortified by the issue framed in Hyder Consultancy (supra),

where the Court was to determine if the conclusion in SL Arora (supra) is correct

to the extent that it holds that post-award interest cannot be granted on the

aggregate of principal and pre-award interest. In the concluding paragraph of

Justice Bobde’s opinion , it has been observed that SL Arora (supra) was

wrongly decided:

“ 24. In the result, I am of the view that SL Arora case is

wrongly decided in that it holds that a sum directed to be

paid by an Arbitral Tribunal and the reference to the

award on the substantive claim does not refer to interest

pendent lite awarded on the “sum directed to be paid

upon award” and that in the absence of any provision of

interest upon interest in the contract the Arbitral Tribunal

does not have the power to award interest upon interest,

or compound interest either for the pre-award period or

for the post0award period. Parliament has the undoubted

power to legislate on the subject and provide that the

Arbitral Tribunal may award interest on the sum directed

to be paid by the award, meaning a sum inclusive of

principal sum adjudged and the interest, and this has

been done by Parliament in plain language.”

17 The decision in Hyder Consulting (supra) was on the limited issue of

whether post-award interest could be granted on the aggregate of the principal

and the pre-award interest. As noted above, the opinion authored by Justice

Bobde was limited to this aspect of post-award interest. It was in the concurring

opinion of Justice Sapre that it was held that the arbitrator only has the discretion

to determine the rate of post-award interest. Therefore, the issue of whether the

arbitrator could award post-award interest on a part of the aggregate sum was

not conclusively decided the opinions forming a part of the majority in Hyder

Consulting (supra).

15

18 The issue before us is whether the phrase ‘unless the award otherwise

directs’ in Section 31(7)(b) of the Act only provides the arbitrator the discretion to

determine the rate of interest or both the rate of interest and the ‘sum’ it must be

paid against. At this juncture, it is crucial to note that both clauses (a) and (b) are

qualified. While, clause (a) is qualified by the arbitration agreement, clause (b) is

qualified by the arbitration award. However, the placement of the phrases is

crucial to their interpretation. The words, “unless otherwise agreed by the parties”

occurs at the beginning of clause (a) qualifying the entire provision. However, in

clause (b), the words, “unless the award otherwise directs” occurs after the words

‘a sum directed to be paid by an arbitral award shall’ and before the words ‘carry

interest at the rate of eighteen per cent”. Thereby, those words only qualify the

rate of post-award interest.

19 Section 31(7)(a) confers a wide discretion upon the arbitrator in regard to

the grant of pre-award interest. The arbitrator has the discretion to determine the

rate of reasonable interest, the sum on which the interest is to be paid, that is

whether on the whole or any part of the principal amount, and the period for

which payment of interest is to be made - whether it should be for the whole or

any part of the period between the date on which the cause of action arose and

the date of the award. When a discretion has been conferred on the arbitrator in

regard to the grant of pre-award interest, it would be against the grain of statutory

interpretation to presuppose that the legislative intent was to reduce the

discretionary power of the arbitrator for the grant of post-award interest under

clause (b). Clause (b) only contemplates a situation where the arbitration award

16

is silent on post-award interest, in which event the award-holder is entitled to a

post-award interest of eighteen percent.

20 The arbitrator has the discretion to grant post-award interest. Clause (b)

does not fetter the discretion of the arbitrator to grant post-award interest. It only

contemplates a situation in which the discretion is not exercised by the arbitrator.

Therefore, the observations Hyder Consulting (supra) on the meaning of ‘sum’

will not restrict the discretion of the arbitrator to grant post-award interest. There

is nothing in the provision which restricts the discretion of the arbitrator for the

grant of post-award interest which the arbitrator otherwise holds inherent to their

authority.

21 The purpose of granting post-award interest is to ensure that the awarddebtor does not delay the payment of the award. With the proliferation of

arbitration, issues involving both high and low financial implications are referred

to arbitration. The arbitrator takes note of various factors such as the financial

standing of the award-debtor and the circumstances of the parties in dispute

before awarding interest. The discretion of the arbitrator can only be restricted by

an express provision to that effect. Clause (a) subjects the exercise of discretion

by the arbitrator on the grant of pre-award interest to the arbitral award. However,

there is no provision in the Act which restricts the exercise of discretion to grant

post-award interest by the arbitrator. The arbitrator must exercise the discretion in

good faith, must take into account relevant and not irrelevant considerations, and

must act reasonably and rationally taking cognizance of the surrounding

circumstances.

17

22 In view of the discussion above, we summarise our findings below:

(i) The judgment of the two-Judge Bench in SL Arora (supra) was referred

to a three-Judge Bench in Hyder Consulting (supra) on the question of

whether post-award interest could be granted on the aggregate of the

principal and the pre-award interest arrived at under Section 31(7)(a) of

the Act;

(ii) Justice Bobde’s opinion in Hyder Consulting (supra) held that the

arbitrator may grant post-award interest on the aggregate of the

principal and the pre-award interest. The opinion did not discuss the

issue of whether the arbitrator could use their discretion to award postaward interest on a part of the ‘sum’ awarded under Section 31(7)(a);

(iii) The phrase ‘unless the award otherwise directs’ in Section 31(7)(b) only

qualifies the rate of interest;

(iv) According to Section 31(7)(b), if the arbitrator does not grant postaward interest, the award holder is entitled to post-award interest at

eighteen percent;

(v) Section 31(7)(b) does not fetter or restrict the discretion that the

arbitrator holds in granting post-award interest. The arbitrator has the

discretion to award post-award interest on a part of the sum;

(vi) The arbitrator must exercise the discretionary power to grant postaward interest reasonably and in good faith, taking into account all

relevant circumstances; and

(vii) By the arbitral award dated 29 April 2013, a post-award interest of

eighteen percent was awarded on the principal amount in view of the

18

judgment of this Court in SL Arora (supra). In view of the above

discussion, the arbitrator has the discretion to award post-award

interest on a part of the ‘sum’; the ‘sum’ as interpreted in Hyder

Consulting (supra). Thus, the award of the arbitrator granting post

award interest on the principal amount does not suffer from an error

apparent.

23 For the reasons indicated above, the appeal against the judgment of the

Delhi High Court dated 26 February 2020 is dismissed.

24 All pending application(s), if any, are disposed of.

 ……....….....….......………………........J.

 [Dr Dhananjaya Y Chandrachud]

 .........….....….......………………........J.

 [AS Bopanna]

New Delhi;

September 01, 2022