The Supreme Court of India, in a significant ruling on arbitration law, has held that when an arbitral award, guided by the agreement between parties, explicitly provides for interest to be paid from the cause of action until the date of repayment, no additional or compound interest can be claimed at the execution stage under Section 31(7)(b) of the Arbitration and Conciliation Act, 1996.

The judgment was delivered by a bench of Justice Manoj Misra and Justice Ujjal Bhuyan in the case of HLV Limited (Formerly known as Hotel Leelaventure Pvt. Ltd.) vs. PBSAMP Projects Pvt. Ltd. The Court set aside a Telangana High Court order that had remanded the matter back to the executing court for reconsideration of interest, thereby restoring the executing court’s original order which had closed

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