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M/s. Gokul Lamp Works Private Limited v. Mysore Lamp Works Limited

Civil Appeal · 2025 INSC 205Decided 7 Feb 2025
Civil Appeal Nos. 2189-2191 of 2025 (arising out of SLP(C) Nos. 22570-22572 of 2024)
Chief Justice · Justice Sanjay Kumar

Background

Arbitral awards passed in 2005 in favour of Gokul Lamp Works Private Limited and Thamaka Lamp Components Private Limited directed Mysore Lamp Works Limited to pay them specified principal sums with pendente lite (during-litigation) interest. Though the principal amounts (plus pendente lite interest) were eventually paid in stages between 2019 and 2023, a dispute arose specifically over the "post-award interest": interest for the period after the award but before actual payment. The High Court had set aside the arbitral award's post-award interest component and dismissed a review against that decision, prompting the appeal to the Supreme Court.

Decision Breakdown

The Supreme Court set aside both the High Court's judgment and its later order dismissing the review petition. It directed Mysore Lamp Works Limited to pay simple interest at 14% per annum on the principal amounts, running from the date of the original 2005 awards until actual payment, with the outstanding payments already made to be adjusted against this. The Court noted it was granting this relief partly because Mysore Lamp Works, though once a functioning company, is now being used for public purposes, and ordered the balance payment to be completed within ten weeks, with liberty for either side to approach the Court again in case of difficulty.

Lesson Learnt

When an arbitral award directs payment of a sum with interest, courts distinguish carefully between interest for different phases of the dispute (pre-award, pendente lite, and post-award): a party is not automatically deprived of post-award interest just because the principal and other interest components have already been settled, and delayed compliance with an award can still attract interest running all the way from the date of the award.

Official source (sci.gov.in)View Judgment (PDF)

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