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Report No. 76

4.28. Position summed up.-

To revert to the present section, the case law discussed above justifies a statement that the present position in India is as follows:-

(a) Period before the institution of legal proceedings is governed by the substantive law of interest,1 including the Interest Act, 1839. It may be assumed that the reference of money claim to arbitration includes a reference as to interest on the money claim.

(b) (i) Where a claim for interest during the pendency of the arbitration is specifically referred to the arbitrator, he can award such interest just as a court could do so under section 34 of the Code of Civil Procedure, 1908.2

(ii) Where a claim for interest during such pendency is not specifically referred to the arbitrator, the arbitrator has no power to award interest.3 Nor does the court have this power, since section 29 operates only from the date of the decree.

(c) As to the period after the date of the award and before the decree, the arbitrator has such a power, if the question of interest for this period has been referred to arbitration.4

(d) The period after the date of the decree is governed by section 29, empowering the Court to award interest.

1. Para. 4.16, supra.

2. M.R. Mahajan v. Hukabhand Mills Ltd., (1967) 1 SCJ 472-474 (case of interest pendente lite) and also para. 4.18, supra.

3. Seth Thawar Das Pherumal v. Union of India, AIR 1955 SC 468: (1955) 2 SCR 48 (64).

4. Para. 4.20, supra.



Arbitration Act, 1940 Back




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