Award of Interest by Arbitrator

The discretion of the arbitrator to award interest must be   exercised   reasonably.

An   arbitral   tribunal   while making   an   award   for   Interest   must   take   into  consideration a host of factors, such as:

(i) the ‘loss of use’  of   the   principal   sum;

(ii)   the   types   of   sums   to which the Interest must apply;

(iii) the time period over which   interest   should   be   awarded;

(iv)   the internationally prevailing rates of interest;

(v) whether simple or compound rate of interest is to be applied;

(vi)   whether   the   rate   of   interest   awarded   is commercially   prudent  from  an  economic  stand­point;

(vii)   the   rates   of   inflation,

(viii)   proportionality   of   the count   awarded   as   Interest   to   the   principal   sums awarded.

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