India’s Supreme Court has clarified that depositing an arbitral award in court does not automatically discharge the debtor or stop interest from accruing.
Interest ordinarily ceases only when the money is deposited in accordance with civil procedure and is unconditionally available to the award-holder. Where withdrawal requires security or judicial permission, the creditor has not received effective payment and interest may continue.
The ruling distinguishes between removing money from a debtor’s control and placing it at the creditor’s disposal. That distinction is commercially significant in arbitration enforcement, where proceedings may continue for years after an award.
The court also recognised limits to the creditor’s entitlement. Interest may not continue where an award-holder fails to seek withdrawal of freely available funds.
