Arbitrator’s discretion to award interest is bound by the parties’ agreement – Supreme Court of India
Case title: HLV Limited vs . PBSAMP Projects Pvt . Ltd . ( 24 . 09 . 2025 – SC )
π The Supreme Court of India addressed whether PBSAMP Projects Pvt. Ltd. was entitled to compound interest on an arbitral award against HLV Limited under Section 31(7) of the Arbitration and Conciliation Act, 1996.
π The Court found that the arbitral tribunal had awarded simple interest at 21% per annum as per the parties’ Memorandum of Understanding, which did not stipulate compound interest.
π The Court held that the tribunal’s discretion was bound by the parties’ agreement, and thus, PBSAMP could not claim compound interest at the execution stage.
π The Court set aside the High Court ‘s order and restored the executing court’s decision, dismissing PBSAMP’s claim for compound interest.
This website has been designed only for the purposes of dissemination of basic information on ADROIT; information which is otherwise available on the internet, various public platforms and social media. Careful attention has been given to ensure that the information provided herein is accurate and up-to-date.
This website is not an attempt to advertise or solicit clients and does not seek to create or invite any lawyer-client relationship. The links provided on this website are to facilitate access to basic information on ADROIT, and, to share the various thought leadership initiatives undertaken by it. The content herein or on such links should not be construed as a legal reference or legal advice. Readers are advised not to act on any information contained herein or on the links and should refer to legal counsels and experts in their respective jurisdictions for further information and to determine its impact.
