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2014 (3) TMI 1143 - SC - Indian LawsDemand of interest - interest between the date when the cause of action arose to the date of award - arbitral award - whether the contractors are entitled to interest for the amount withheld and if so at what rate? - Held that:- Section 37(1) of the new Act by using the words "unless otherwise agreed by the parties" categorically clarifies that the arbitrator is bound by the terms of the contract insofar as the award of interest from the date of cause of action to the date of award. Therefore, where the parties had agreed that no interest shall be payable, the Arbitral Tribunal cannot award interest between the date when the cause of action arose to the date of award. The arbitrator could not have awarded any interest from the date when the recovery was made till the award was made. However, interest would have been payable from the date when the award was made till the money was deposited in the High Court and thereafter converted to fixed deposit receipts. Upon the amount being deposited in the High Court, no further interest could be paid to the Respondents. It is directed that the Respondents shall not be entitled to any interest on the amount which was recovered by the Appellant, till the date of award and thereafter till the date when the amount awarded was deposited in the High Court, i.e. from 12th July, 1997 - appeal allowed.
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