Re-examining Balasamy: Why Courts Should Retain Discretion to Modify Pendente Lite Interest

This article critically examines the Supreme Court’s Gayatri Balasamy judgment, arguing it created an artificial and unjustified distinction between pendente lite interest and post-award interest by disallowing judicial modification of pendente lite interest in arbitral awards. It contends this restriction lacks a statutory basis under the Arbitration and Conciliation Act, 1996, and contradicts a history of judicial precedents where courts have intervened to rectify exorbitant interest rates. The analysis highlights that retaining the court’s power to modify pendente lite interest is essential for upholding the principle of compensatory justice and ensuring awards remain equitable and fair.