Post-award interest under arbitration law may be confined to principal amount when the tribunal so directs.

Section 31(7)(b) of the Arbitration and Conciliation Act, 1996 leaves the arbitral tribunal discretion to award post-award interest on part of the awarded sum, and the phrase "unless the award otherwise directs" qualifies only the rate when the award is silent. Section 31(7)(a) separately governs the tribunal's discretion on pre-award interest, including the rate, quantum and period. The earlier view in S. L. Arora was overruled to the extent it denied interest on interest, while Hyder Consulting confirmed that the merged amount may constitute the "sum" for post-award interest. The tribunal's decision to confine post-award interest to the principal amount was therefore upheld, and no interference was warranted.

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Issues: Whether, under Section 31(7)(b) of the Arbitration and Conciliation Act, 1996, the arbitral tribunal has discretion to award post-award interest only on the principal sum, and whether the award granting post-award interest only on the principal amount was liable to be interfered with.

Analysis: Section 31(7)(a) empowers the arbitral tribunal to decide the rate, quantum, and period for pre-award interest, while Section 31(7)(b) is triggered where the award is silent on post-award interest. The phrase "unless the award otherwise directs" in clause (b) qualifies only the rate of post-award interest and does not curtail the tribunal's discretion to decide the amount on which such interest is granted. The earlier view in S. L. Arora was overruled to the extent it denied interest on interest, and Hyder Consulting established that the merged amount may constitute the "sum" for the purpose of post-award interest; however, that decision did not decide that the tribunal is bound in every case to apply post-award interest only on the aggregate sum. The tribunal therefore retains discretion, to be exercised reasonably and in good faith, to award post-award interest on part of the sum.

Conclusion: The arbitral tribunal was competent to confine post-award interest to the principal amount, and the award did not suffer from any error warranting interference.

Final Conclusion: The appeal failed and the judgment under challenge was left undisturbed.

Ratio Decidendi: Section 31(7)(b) of the Arbitration and Conciliation Act, 1996 does not fetter the arbitral tribunal's discretion to award post-award interest on part of the awarded sum, and the phrase "unless the award otherwise directs" qualifies only the rate of interest where the award is silent on the point.

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