More Stories

Informist, Friday, Sept. 18, 2026

 

NEW DELHI – The Supreme Court on Friday asked the Law Commission of India to examine issues regarding the deposit of decretal arbitral award amounts in courts pending disposal of appeals and how accrued interest should be accounted for when the cases are finally decided. The apex court also asked the Law Commission to consider laws enacted by other countries and to consult the Reserve Bank of India, the Ministry of Finance, and the Ministry of Law and Justice in the process. 

 

Essentially, the dispute relates to what happens when a party that has lost an arbitral award challenges it before a court. While staying enforcement of an arbitral award, a court may ask the party to deposit the amount in the court's registry. The apex court Friday said there is a need for a clearer and more uniform approach to the deposit, investment, and adjustment of interest accruing on such deposits during the pendency of appeals. 

 

The court said it is necessary to develop a consistent normative principle by which the deposited amount secures the decree-holder's interest while also accounting for the judgment debtor's mounting interest liability on the decreed amount. A standard principle is also needed by which such deposits and interest accrued thereon get adjusted in the final settlement, it said. 

 

The court said there is neither a statutory prescription nor a rule or regulation to follow. At the same time, instead of evolving consistent principles, courts and tribunals have passed orders on a case-to-case basis, leading to a great deal of disparity and inconsistency, it said.    

 

The decree-holder, despite obtaining a favourable decree, cannot use the decretal money because the terms of withdrawal are entirely at the court's discretion, the bench of Justice P.S. Narasimha and Justice Alok Aradhe said. A lack of standardisation does not allow the decree-holder to plan his financial outlays clearly, as the money to which the decree-holder is entitled is put into a deposit outside his control, it said. This is also a loss of the opportunity cost of the alternative economic use of that money, it added. End

 

Reported by Surya Tripathi

Edited by Saji George Titus

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.