Interest On Awarded Amount Cannot Exceed Rate Of 6% As Provided U/S 30(7) Of J&K Arbitration Act: High Court

The Jammu & Kashmir And Ladakh High Court bench of Justice M A Chowdhary has held that section 30 of the Jammu and Kashmir Arbitration Act, 1997 which was amended in 2010 is retrospective in nature. It was further submitted that Section 31 of the J&K Arbitration and Conciliation Act, 1997 provided for grant of interest by the arbitrator for any pre-reference and pendent-lite period at such rate, as the Arbitrator may deem reasonable and after passing of the award @ 18% per annum till the date of payment. When a discretion is vested to an arbitral tribunal to award interest at a rate which it deems reasonable, then a duty would be cast upon the arbitral tribunal to give reasons as to how it deems the rate of interest to be reasonable.” The court in the above case also observed that it could further be seen that the arbitral tribunal has also a discretion to award interest on the whole or any part of the money or for the whole or any part of the period between the date of cause of action and the date on which the award is made. Section 30 of the Act further provides that from the date when the cause of action arose, till the award is made, the Arbitrator has powers to award interest as he/she may deem reasonable but not exceeding 6% on the whole or any part of the money or for the whole or any part of the period. Reverting to the impugned award, it appears that the same was passed on 06.12.2013 after the amendment was made in the year 2010, as such, the learned Arbitrator was bound by the amended provision as contained in subsection of Section 31 of the J&K Arbitration and Conciliation Act, 1997, the court observed.