Legal Question in Civil Litigation in India

Arbitration and Reconciliation Act 1996

Section 31(7) of Arbitration and Reconciliation Act 1996 mentions interest on money. Please clarify whether the interest to be charged is simple or compound?

Should a creditor charge compound interest if he/she receives money after more than one year from the arbitration award or accept simple interest?

Asked on 11/23/06, 12:44 am

2 Answers from Attorneys

Re: Arbitration and Reconciliation Act 1996

You are advised to consult section 37 (a)& (b) of arbitration Act which empowers Arbitral tribunal to award interest and s.7(b) clearly state rate of interest @18% per annum from the date of award till payment unless award direct otherwise.

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Answered on 11/24/06, 1:36 am

Jayesh Desai Jayesh Desai

Re: Arbitration and Reconciliation Act 1996

As per Interest Act and as per CPC you can only charge simple interest. Cumulative interest cannot be charged, there are sufficient SC judgments in this regard.

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Answered on 11/26/06, 9:37 am

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