Supreme Court Directs 14% Simple Post‑Award Interest From Date of Arbitral Awards and Sets Aside High Court Order

A bench of Chief Justice Sanjiv Khanna and Justice Sanjay Kumar heard civil appeals arising out of special leave petitions challenging a High Court judgment that had set aside arbitral awards on the question of post‑award interest. The appeals concerned payment of post‑award interest to two appellants who obtained awards dated 19.01.2005 from an Arbitral Tribunal and contested the High Court’s orders dated 18.11.2022 and 30.05.2024.

The Court allowed the appeals in part and directed the respondent, Mysore Lamp Works Limited, to pay simple interest at the rate of 14% per annum from the date of the awards (19.01.2005) until payments were made. The Court noted earlier pendente lite payments and specified set‑off against principal amounts, ordered production of a computation sheet, and gave a ten‑week timeline for payment while reserving liberty to the parties to approach the Court in case of difficulty. The Court, in its reasoning, observed: "Having considered the pleas and contentions of the parties, we are inclined to set aside the impugned judgment dated 18.11.2022, which had set aside the award on the question of payment of post‑award interest. We direct that the respondent, Mysore Lamp Works Limited, will pay simple interest at the rate of 14% per annum from the date of the award, that is 19.01.2005 till payment(s) is/are made. The impugned order dated 30.05.2024 dismissing the review petition filed against the judgment dated 18.11.2022 is also accordingly set aside."

Background

The dispute arose from arbitral awards dated 19.01.2005 in Arbitration Case Nos. 58/1998 and 51/1998 in favour of M/s. Gokul Lamp Works Private Limited and M/s. Thamaka Lamp Components Private Limited against Mysore Lamp Works Limited. During hearing before the Supreme Court, the parties accepted that pendente lite payments had been made: M/s. Gokul Lamp Works received ₹60,94,400 along with pendente lite interest at 12.75% per annum and M/s. Thamaka Lamp Components received ₹54,37,036 with pendente lite interest at the same rate. The remaining contest related solely to post‑award interest from 19.01.2005 until two stages of payments/deposits — ₹15,23,600 on 09.04.2019 and ₹91,03,844 on 20.01.2023 for Gokul, and ₹13,59,260 on 09.04.2019 and ₹81,31,312 on 20.01.2023 for Thamaka — which were to be set off against the respective principals.

The High Court had set aside the awards on the question of post‑award interest by its order dated 18.11.2022 and later dismissed a review petition on 30.05.2024. On appeal, the Supreme Court examined the parties’ contentions and the accounting of payments and interest. The Court set aside the High Court’s orders, directed payment of simple interest at 14% per annum from the award date until actual payment, and ordered that a copy of the computation chart be furnished to the appellants. The Court observed that the respondent was "earlier functional but is now being used for public purposes," and took that fact into account in directing the schedule for compliance. The Supreme Court gave the parties liberty to file an application before the Court in case of difficulty or failure to comply; it also warned that the rate of interest might be revised in case of delay in payment. The appeals were partly allowed and disposed of; pending applications, if any, were disposed.

Case Details: Case No.: 2025 INSC 205; Civil Appeal Nos. of 2025 (arising out of SLP(C) Nos. 22570‑22572 of 2024) Case Title: M/s. Gokul Lamp Works Private Limited etc. v. Mysore Lamp Works Limited Appearances: For the Petitioner(s): Advocates not indicated in the order For the Respondent(s): Advocates not indicated in the order