Post-award interest under the Arbitration and Conciliation Act, 1996 prevails over a repealed State amendment, restoring 18% interest.

Para 7A of Section 24 of the Uttar Pradesh Civil Laws (Reforms and Amendment) Act, 1976 was held inapplicable to arbitral proceedings commenced under the Arbitration and Conciliation Act, 1996, because Section 85 of the 1996 Act repealed the earlier Arbitration Act, 1940 and the State amendment attached to the repealed regime could not control proceedings under the later statute. Section 31(7)(b) of the 1996 Act was treated as the governing provision for post-award interest, under which a sum directed to be paid by an arbitral award carries interest at 18% per annum from the date of award to payment unless the award directs otherwise. The attempted reduction of post-award interest to 6% was therefore not justified.

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Issues: Whether para 7A of Section 24 of the Uttar Pradesh Civil Laws (Reforms and Amendment) Act, 1976 could be applied to arbitral proceedings commenced under the Arbitration and Conciliation Act, 1996 so as to reduce the post-award interest from 18% to 6%, and whether the interest awarded under Section 31(7)(b) of the 1996 Act was liable to be restored.

Analysis: The arbitral proceedings commenced after the Arbitration and Conciliation Act, 1996 came into force. Section 85 of the 1996 Act repeals the Arbitration Act, 1940, and the State amendment embedded in the First Schedule of the repealed Act could not govern proceedings initiated under the 1996 regime. Section 31(7)(b) specifically provides that, unless the award otherwise directs, a sum directed to be paid by an arbitral award carries interest at 18% per annum from the date of award to the date of payment. The reduction of interest on the basis of the repealed State amendment was therefore not justified.

Conclusion: Para 7A of Section 24 of the Uttar Pradesh Civil Laws (Reforms and Amendment) Act, 1976 was inapplicable, and the arbitral award of post-award interest at 18% per annum under Section 31(7)(b) of the Arbitration and Conciliation Act, 1996 was restored in favour of the appellant.

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