The hydrofoils are essential element in tidal current turbine and in high speed marine crafts. Hence, the study of hydrodynamic characteristics of hydrofoils are important as they play a vital role in improving the performance of these propulsion devices (hydro-kinetic turbine, marine craft). In the present study, the dynamics of unsteady and viscous flow around a two hydrofoil system is investigated for two different configuration: (a) tandem, and in (b) stagger arrangement. The incompressible Navier-Stokes equations were solved using Finite Volume Solver in STAR-CCM+ commercial software package. k-ε turbulence model is incorporated in the present simulation in order to explain the turbulence flow physics while the free surface is captured using Volume of Fluid (VOF) technique. Further, the obtained numerical simulation results were compared with experimental data available in the literature as a validation purpose. The objective of the present study is to investigate the effects of spacing distance on the lift and drag coefficient generated by two foil system in tandem and stagger arrangements which is one of the important design parameter for a tidal turbine blades in presence of free sea surface. It could be observed that the hydrofoils are arranged in tandem configuration, the lift coefficients of the upstream and downstream hydrofoils are higher in comparison to single hydrofoil. Interference effect didn’t die out even at large spacing for 2-D hydrofoil.