Section 31(7) of The Arbitration Act VIII

Hyder Consulting (UK) Ltd. v. Governor, State of Orissa, (2015) 2 SCC 189 overruled State of Haryana v. S.L. Arora, (2010) 3 SCC 690. While giving a concurring opinion, Justice Sapre made pertinent observations: “Section 31(7)(b) uses words ‘Arbitral Award’ and not ‘Arbitral Tribunal’. ‘Arbitral Award’ as held, is made in respect of a ‘sum’ which includes ‘interest’. It is, therefore, obvious, what carries under Section 31(7)(b) is ‘sum directed to be paid by an Arbitral Award’ and not any other amount much less by or under name of ‘interest’. In such situation, it cannot be said, what is being granted under Section 31(7)(b) is ‘interest on interest’; ‘interest’ under Section 31(7)(b) is granted on ‘sum’ directed to be paid by ‘Arbitral Award’ wherein ‘sum’ is nothing more than what is arrived at under Section 31(7)(a).”

Hon’ble Justice Hima Kohli, UHL Power Company Ltd. v. State of Himachal Pradesh, [Civil Appeal No. 10341 of 2021].