Delhi High Court on Post-Award Interest in Arbitration: No Interest on Pendente Lite Amount.

The Delhi High Court held that post-award interest under Section 31(7)(b) of the Arbitration and Conciliation Act, 1996 is payable only on the principal amount directed to be paid by the award, and not on a separate lump sum amount awarded as pendente lite interest. The Supreme Court had extended the period for which post-award interest would be payable but did not expand its scope to include pendente lite interest. Accordingly, the decree stands satisfied and no further interest is payable by the judgment debtor.

1. The petition sought execution of an arbitral award dated 26 September 2000, as modified by the Calcutta High Court Division Bench and later by the Supreme Court.
2. The award directed Bharat Sanchar Nigam Limited (BSNL) to pay Rs. 6,07,56,342/- including interest at 18.5% per annum.
3. Post-award, disputes arose regarding whether post-award interest should be calculated on the principal alone or on the principal plus pendente lite interest (Rs. 67,62,366/-).
4. Supreme Court in its order clarified that statutory interest under Section 31(7) is payable from the date of the award to the date of payment, but only on the principal sum, extending the period to include 26 September 2000 to 15 October 2004.

1. Division Bench awarded post-award interest only on the principal amounts of Rs. 48,23,819/- and Rs. 8,11,486/-, not on the lump sum pendente lite interest.
2. Supreme Court did not modify the direction regarding the scope of post-award interest, only the period for which it is payable.
3. Section 31(7)(a) allows the Arbitral Tribunal discretion to include interest in the sum awarded; Section 31(7)(b) mandates post-award interest on the “sum directed to be paid,” interpreted to mean the principal alone when pendente lite interest is separately awarded.
4. Reliance on Hyder Consulting (UK) Ltd. v. Governor, State of Orissa (2015) 2 SCC 189 confirmed that interest on post-award period does not automatically extend to separately awarded pendente lite interest.

1. Section 31(7), Arbitration and Conciliation Act, 1996 – Interest provisions in an arbitral award.
2. Section 34 & 37, Arbitration and Conciliation Act, 1996 – Challenge to arbitral award and appellate remedy.

1. No further post-award interest is payable on the lump sum pendente lite interest awarded by the Division Bench.
2. The decree stands satisfied.
3. Petition disposed of.

1. Post-award interest under Section 31(7)(b) applies only to the principal sum directed to be paid in an arbitral award, unless the award explicitly includes other components.
2. Supreme Court modifications extending periods for interest do not alter the scope of the sum on which interest is payable.
3. Confirms distinction between pendente lite interest and principal for the purpose of post-award interest in enforcement proceedings.

Citation: 2025:DEL:247/2023

Case: BWL Limited (Formerly Bhilai Wires Ltd.) v. Bharat Sanchar Nigam Limited

Court: High Court of Delhi at New Delhi

Coram: Hon’ble Mr. Justice Amit Bansal

Date of Decision: 19 November 2025

Original Petition (Enf.) (Comm.) No.: 247/2023