Case Note & Summary
The Supreme Court addressed two appeals concerning the conversion date of an awarded sum from USD to Indian Rupees under an arbitration award. The disputes arose from an agreement executed in 1982 between National Projects Construction Corporation Limited and Royal Construction Company Private Ltd. regarding earthwork in Iraq. Following an arbitration award in 2002, which stipulated payments in Iraqi Dinars and US Dollars, the NPCCL challenged the award under the Arbitration and Conciliation Act, 1996. The Delhi High Court initially reduced the interest rate and fixed the conversion date to the date of the award, which was contested by NPCCL. The Supreme Court, in its 2015 judgment, reinstated the original agreement's terms, stating that the conversion date should be as per the agreement and criticized the High Court's reduction of interest. The current appeals arose after the RCCPL initiated execution proceedings, leading to a Division Bench's order that referred the conversion date question back to the Supreme Court. The Court examined the agreement and award, concluding that there was no provision for payment in Indian currency, only in foreign currencies. It determined that the question of fixing a conversion date for Indian currency was moot, as payments were to be made in foreign currency only. The appeals were disposed of, allowing RCCPL to continue execution proceedings as per law.
Headnote
A) Arbitration - Currency Conversion - Relevant Date for Conversion - Constitution of India, Article 134A - The court clarified that the date of conversion of awarded amounts should align with the original agreement dated 29.06.1982, rejecting any contrary determinations made by lower courts. Held that the agreement and award did not permit conversion to Indian currency, only to US Dollars (Paras 1-14).
Issue of Consideration
What should be the relevant date for conversion of the awarded sum from USD to Indian rupees as per the agreement and previous judgments?
Final Decision
The Supreme Court dismissed both appeals, clarifying that the conversion date for the awarded amount should be as per the original agreement dated 29.06.1982 and that payments must be made in foreign currency only, allowing RCCPL to continue execution proceedings.
Law Points
- Arbitration
- Currency Conversion
- Contractual Obligations
- Interest Rate Determination
