Report No. 246

Amendment of Section 31

17. In section 31

(i) In sub-section (4), after the words "its date and the" delete the word "place" and add the word "seat"

(ii) In sub-section (7),In sub-clause (b), after the words "carry interest at" add the words "2% per annum more than" and before the words "rate of" add the word "current" and after the words "rate of" delete the words "eighteen per centum per annum" and add the word "interest".

(iii) In sub-section (7), after sub-clause (b), add the words "Explanation 1: The expression "current rate of interest" shall have the same meaning as assigned to it under Clause (b) section 2 of the Interest Act, 1978.

Explanation 2. The expression "sum directed to be paid by an arbitral award" includes the interest awarded in accordance with section 31(7)(a)."

[Note: Explanation 1 ensures that the default rate of interest is in line with prevailing commercial realities and not an arbitrary figure of 18%.

Explanation 2 intends to legislatively overrule the decision of the Supreme Court in State of Haryana v. S.L. Arora, (2010) 3 SCC 690, the correctness of which has now been referred to a larger bench by virtue of the decision of the Supreme Court in Hyder Consulting (U.K.) v. Governor of Orissa, (2013) 2 SCC 719.]

(iv) In sub-section (8), after the words "by the parties" delete ",-" and delete the provision for sub-clause (a) before the words "the costs of" and after the words "fixed by the arbitral tribunal" delete ";" and add the words "in accordance with section 6A of this Act."

(v) Rest of the sub-section 8 be deleted.