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Report No. 76

4.20. Third peri.- High Court decision.-

As to the third period-interest between the award and the decree-the principal question that has arisen is this. Can the arbitrator award interest for the period after the date of the award and before the date of the decree of the Court? It may be noted that this period is not governed by section 29 of the Arbitration Act, nor by section 34 of the Code of Civil Procedure, 1908. For this reason some uncertainty prevailed on the subject, until the position was settled by a decision of the Supreme Court, to the referred to in due course.1

1. Para. 4.32, infra.

4.20A. Amongst the High Courts, there arose a conflict as regards the power to award interest for the period after the award. According to one view,1 power to award interest for this period (date of award to date of decree) can be derived from the arbitration agreement. It has been pointed out that such a power was recognised before the passing of the Arbitration Act, 1940 and arbitrators continue to retain the power after the passing of that Act, there being nothing in section 29 which takes away this power. It was also pointed out that the observations of the Supreme Court as to the power to award interest made in the case2 reported in 1955 were limited to the question of interest on unliquidated damages, and the court did not hold that the arbitrator had no power or award interest on a debt for the period from the award to the date of the decree.

1. (a) Union of India v. Bungo Steel Furniture Pvt. Ltd., AIR 1963 Cal 73 (74) paras. 12.14 (R.S. Bachwat and K.N. Laik, JJ.);

(b) Chidambaram v. Subramaniam, AIR 1953 Mad 492.

2. Thawardas v. Union of India, (1955) 2 SCR 48: AIR 1955 SC 468, para. 4.23, infra.

Arbitration Act, 1940 Back

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