Law and justice explained
Can an arbitrator award interest and legal costs?
Yes, interest and costs may be granted in suitable cases. Sections 31(7) and 31A, the contract, claim and any governing statute require joint analysis.
Written by
Advocate Amardeep Jaiswal
Advocate, High Court of Madhya Pradesh, Jabalpur
Key points
- Can an arbitrator award interest and legal costs?
- Direct answer Yes, interest and costs may be granted in suitable cases.
- Sections 31(7) and 31A, the contract, claim and any governing statute require joint analysis.
Detailed analysis
Understanding law and procedure
Can an arbitrator award interest and legal costs?
Direct answer
Yes, interest and costs may be granted in suitable cases. Sections 31(7) and 31A, the contract, claim and any governing statute require joint analysis.
Legal position and important distinctions
Pre-award and post-award interest can operate differently.
A contractual restriction or agreed rate may matter.
How the situation works in practice
- A successful party does not automatically recover every claimed legal fee; conduct and reasonableness matter.
- MSMED interest is governed by its separate statutory framework.
Practical next steps
- Read the contract's interest provision.
- Prepare principal and interest schedules.
- Document and justify claimed legal costs.
Avoid this common mistake
Claiming an arbitrary compound interest rate does not create a legal entitlement.
Official legal source and disclaimer
India Code — Arbitration and Conciliation Act, 1996
General legal information only. The result depends on the agreement, applicable amendments, dates, jurisdiction and record. This is not individual legal advice or a promise of success; verify the current law and binding decisions before publication or action.
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About the author
Advocate Amardeep Jaiswal
Advocate, High Court of Madhya Pradesh, Jabalpur।
Publishes informational articles on Indian law, judicial decisions and practical legal issues.
Editorial note: Analysis and commentary reflect the author’s understanding and opinion. Law, facts and judicial developments may change; check primary sources and your own circumstances before acting.