UHL Power Secures Rs 26.08bn Interest Award

Authority: Supreme Court of India (Civil Appellate Jurisdiction)

Order Date: 13 October 2026

Case Overview

• Parties: UHL Power Company Limited (appellant) vs State of Himachal Pradesh (respondent).
• Arbitration: Award dated 12 May 2003 granted Rs 26,08,89,107.35 as expenses with interest @9% from claim filing to award, and @18% thereafter; also general damages and costs.
• High Court (Section 37) reduced principal to Rs 9,10,26,558.74, applied simple interest @6% from filing to realization, deleted interest on interest and counter‑claim.
• Supreme Court examined whether compound interest was permissible; referenced S.L. Arora (overruled) and Hyder Consulting (2015) decisions.
• Court held that High Court’s finding that arbitrator cannot award compound interest was erroneous; restored interest as per original award (9% pre‑award, 18% post‑award, capitalized annually), but did not restore capitalized pre‑claim interest.

Final Outcome

• Appeal allowed; the order modifying the award under Section 37 is set aside.
• Execution to follow Supreme Court’s directions, applying the restored interest rates.
• All pending applications were ordered disposed of.

Topics: Arbitration Interest, Supreme Court Judgment