Arbitrator's power to award pre-reference interest turned on the governing Interest Act and the ambiguous lump-sum award.

An arbitrator's power to award pre-reference interest was examined against the Interest Act, 1839 and the later enlargement under the Interest Act, 1978. The text notes that pre-reference interest was not generally available under the 1839 Act, while the 1978 Act expanded that position. However, the award granted only a lump sum as interest without identifying the period or rate, and the record did not show whether it covered only pre-reference interest or also pendente lite interest. In those circumstances, it was considered unsafe to treat the award as necessarily contrary to the law then in force, and the matter was not reopened after a long delay.

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Issues: Whether the interest awarded by the arbitrator could be interfered with on the ground that pre-reference interest was not payable because the proceedings commenced before the Interest Act, 1978 came into force.

Analysis: The dispute turned on the scope of an arbitrator's power to award interest for the pre-reference period and, incidentally, the distinction between pre-reference interest and pendente lite interest. The position under the Interest Act, 1839 did not confer such power for the pre-reference period, while the later Interest Act, 1978 enlarged the position. Although reliance was placed on the earlier law, the award in question merely granted a lump sum by way of interest without specifying the period or rate, and the record did not show whether the amount represented pre-reference interest alone or also included pendente lite interest. In that situation, the Court found it unsafe to infer that the award necessarily violated the then applicable law. The Court also declined to reopen the matter after such a long lapse of time.

Conclusion: The challenge to the award of interest failed and the appeal was dismissed.

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