HLV LIMITED (FORMERLY KNOWN AS HOTEL LEELAVENTURE PVT. LTD.) versus PBSAMP PROJECTS PVT. LTD.

Citation: [2025] 9 S.C.R. 1378 · Decided: 24-09-2025 · Supreme Court of India · Bench: MANOJ MISRA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

[2025] 9 S.C.R. 1378 : 2025 INSC 1148
HLV Limited  
(Formerly Known as Hotel Leelaventure Pvt. Ltd.) 
v. 
PBSAMP Projects Pvt. Ltd.
(Civil Appeal No. 12234 of 2025)
24 September 2025
[Manoj Misra and Ujjal Bhuyan,* JJ.]
Issue for Consideration
Whether in the facts and circumstances of the case, the decree 
holder (respondent) would be entitled to interest upon interest in 
terms of s.31(7)(b), Arbitration and Conciliation Act, 1996 or the 
interest awarded by the arbitral tribunal in the award in terms of 
the memorandum of understanding (MoU) entered into between 
the parties i.e. between the appellant and the respondent fulfil the 
requirement of s.31(7)(a) and (b) of the said Act.
Headnotes†
Arbitration and Conciliation Act, 1996 – s.31(7)(a), (b) – High 
Court set aside the order of the Executing Court rejecting the 
petition filed by the respondent-decree holder for enforcement 
of the arbitral award on the ground that respondent is not 
entitled to compound interest and that the amount paid by 
the appellant-judgment debtor to the respondent was in full 
satisfaction of the award – Respondent, if entitled to interest 
upon interest in terms of s.31(7)(b) or the interest awarded by 
the arbitral tribunal in the award in terms of the MoU entered 
into between the parties fulfil the requirement of s.31(7)(a) 
and (b):
Held: 1.1 Clause 6(b) of the MoU expressly provided that in the 
event of termination of the MoU, the appellant must refund all 
advances with interest at the rate of 21% per annum from the 
respective dates of disbursement till repayment – Thus, in the light 
of the express provision contained in clause (a) of sub-section (7) 
of s.31, the arbitral tribunal awarded interest in terms of the MoU 
from the date of the cause of action till the date of repayment – 
As the arbitral tribunal had expressly provided interest till the date 
* Author
[2025] 9 S.C.R. 
1379
HLV Limited (Formerly Known as Hotel Leelaventure 
Pvt. Ltd.) v. PBSAMP Projects Pvt. Ltd.
of repayment, question of additional or compound interest under 
clause (b) of sub-section (7) of s.31 would not arise. [Para 29]
1.2 Arbitral tribunal in its award complied with the MoU agreed by 
and between the parties – Thus, it exercised its discretion within 
the overall framework of s.31(7) aligning with the legislative intent 
that the award, rather than the statutory default, should govern the 
parties, more so in a case as in the present one where the parties 
themselves made provision for interest throughout. [Para 29]
1.3 Reliance placed by the respondent on Hyder Consulting case 
to claim post-award interest is misplaced – That principle would 
apply only when the arbitral tribunal leaves a matter unqualified 
or is silent – In the present case, the arbitral tribunal bound by the 
MoU and exercising its statutory discretion had already specified the 
interest rate (21% per annum) and the duration (until repayment). 
[Para 30]
1.4 The MoU did not stipulate compounding of interest; the arbitral 
tribunal did not award compound interest; therefore, respondent 
cannot at the stage of execution seek to introduce claim of 
compound interest by drawing on general principles. [Para 31]
1.5 High Court not justified in setting aside the order of the executing 
court and remanding the matter for fresh determination – Impugned 
judgment set aside – Order of the executing court restored. 
[Paras 32, 33]
Arbitration and Conciliation Act, 1996 – s.31(7)(a), (b) – ‘sum’; 
‘unless the award otherwise directs’:
Held: 1.1 From a conjoint analysis of s.31(7)(a) and s.31(7)(b), it 
is discernible that insofar award of interest from the date on which 
the cause of action arose till the date of the award is concerned, 
the legislative intent is that the parties possess the autonomy to 
determine the interest and the rate of interest for the aforesaid 
period – Clause (a) i.e. discretion of the arbitral tribunal to award 
interest is subject to agreement by and between the parties – 
Therefore, party autonomy takes precedence over the discretion 
of the arbitral tribunal. [Para 20]
1.2 However, clause (b) is subject to award of interest by the 
arbitral tribunal – As per clause (b), the ‘sum’ directed to be paid 
under an arbitral award shall carry interest at the rate of 18% per 
annum from the date of the award to the date of payment ‘unless 
the award otherwise directs’ – Therefore, this provision is subject 
1380
[2025] 9 S.C.R.
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