Sara Limited (Referred as 'Sara') entered into a contract with Yaso Infra Limited (Referred as 'Yaso Infra') for installation of pipeline equipment. The contract contained an arbitration clause for resolving disputes. Du

Under Section 31(7)(a) of the Arbitration and Conciliation Act, 1996, an arbitral tribunal may include in the award interest for the whole or part of the period between the date on which the cause of action arose and the date of the award, unless the parties have agreed otherwise. The expression "unless otherwise agreed by the parties" contained in Section 31(7)(a) indicates that the arbitral tribunal's power to award interest may be excluded only through an express contractual stipulation. In the absence of such exclusion, award of pendente lite interest remains within the tribunal's discretion. In the case of Oil and Natural Gas Corporation Ltd. v. M/s G & T Beckfield Drilling Services Pvt. Ltd. , the Court ruled that arbitrators retain their statutory power to award pendente lite interest unless the parties' agreement contains language that either explicitly or through necessary inference removes this authority. In the given case, the arbitral tribunal granted interest for the period during which arbitration was pending. Since there is no indication that the contract prohibited grant of interest, the tribunal acted within its statutory powers. Therefore, the grant of pendente lite interest by the arbitral tribunal is legally valid, and the challenge by Sara Limited is unlikely to succeed.