In commercial arbitration, claim quantification must account for statutory interest and legal cost allocations. Under Section 31(7) and Section 31A of the Arbitration and Conciliation Act, 1996, the arbitral tribunal is statutorily empowered to award pre-reference, pendente lite, and future interest, alongside implementing a comprehensive legal costs regime.
A critical commercial provision introduced by the 2015 amendment is Section 31A, which codifies the international principle that 'costs follow the event'—meaning the unsuccessful party should normally bear the reasonable legal fees and administrative expenses of the prevailing party. If a tribunal deviates from this rule, it must record reasons in writing, considering conduct and frivolous delays. When parties structure an arbitration agreement in adr, evaluating potential adverse cost consequences is vital. Retaining an experienced arbitration lawyer ensures robust claim substantiation, while seasoned advocates in Chennai or a strategic high court lawyer protect balance sheet interests before lawyers for high court review cost awards.
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