On 12-09-2025, the Supreme Court dismissed a Special Leave Petition (SLP) filed by Hindustan Ship Yard Ltd. (Petitioner) (Hindustan Ship Yard) against an order passed by the Andhra Pradesh High Court. While affirming said order, the bench of Justice Manoj Mishra and Justice Ujjal Bhuyan held that the courts below were justified in awarding post-award interest as per the unamended provisions of the Arbitration and Conciliation Act, 1996 (Act), and that the reference point for determining Indian rupee value of foreign currency component would be the date when the award became enforceable as a decree.
In the instant matter, Hindustan Ship Yard had challenged a couple of arbitral awards dated 20-04-2001 and 24-10-2001 under Section 34 of the Act. Upon dismissal of said applications vide orders dated 10-10-2022 and 01-11-2002, Hindustan Ship Yard filed appeals u/s 37 of the Act before the High Court. By order dated 29-09-2004, the High Court allowed both appeals and set aside the impugned awards.
Further, an appeal to the said order by the High Court was allowed by the Supreme Court, and the arbitral awards were restored. Resultantly, execution petitions were filed along with an application for attachment of assets.
Hindustan Ship Yard opposed the attachment by contending that the Arbitral Tribunal had granted interest till the date of the award, and hence, no interest could be included from the date of the award, and even if said interest is to be awarded, it could not be higher than the one awarded up to the date of the award. It was further contended that the dollar rate for conversion into Indian rupees should be as it was prevalent at the time of dismissal of the Section 34 application.
The execution court adopted the dollar rate as per Hindustan Ship Yard’s contentions, but found that the post-award interest at 18% was acceptable. Aggrieved by this order, both sides filed revisions before the High Court. The revision filed by M/S Essar Oil Ltd Mumbai (Respondent) was accepted, whereas the one filed by Hindustan Ship Yard was rejected, and it was held that the dollar conversion rate should be with reference to the date when the award was restored.
Aggrieved, Hindustan Ship Yard approached the Supreme Court and contended that the High Court should have computed the amount payable by converting the dollar component into rupees and should not have left it for the execution court. The petitioner also opposed the rate of interest.
Essar Oil contended that the High Court had already determined the conversion rate of the dollar and that the computation was a mere arithmetical exercise which could have been done by the execution court. Regarding the post-award interest, it was contended that the same would be payable as per the statutes prevalent on the date the award was passed.
The Supreme Court found substance in the submission of Essar Oil. The Court referred to DLF Limited and Other v. Koncar Generators and Motors Limited (2025) 1 SCC 343 and Forasol v. ONGC, 1984 Supp SCC 263, and stated that even if the date of decree is taken, as per the Forasol (supra) judgment, the date of reckoning for conversion of foreign currency would be the date when the Court restored the award. In furtherance, the Court affirmed holdings of the High Court and said that the date when the award became enforceable as a decree would be the reference point for determining the rupee value.
The Court stated that in absence of any direction regarding the post-award interest, either in the arbitral award or in the order of the Court while deciding the objection under Section 34, the execution court had no option but to comply with the mandate of the applicable law. Further, since the amended provision of Section 31(7) became operational after passing and enforcement of award, the Courts were justified in awarding interest as per the unamended provision of the Act.
Thus, the Court found no fault in the orders passed by the High Court and dismissed the SLPs accordingly.
Cases relied on –
DLF Limited and Other v. Koncar Generators and Motors Limited (2025) 1 SCC 343
Forasol v. ONGC, 1984 Supp SCC 263
Appearances –
Petitioner(s) – Adv DVSS Somayajulu, AOR Vipin Nair, Adv MB Ramya, Adv Aditya Narendranath, Adv Deeksha Gupta, Adv Puspita Basak
Respondent(s) – Adv Vanita Bhargava, Adv Ajay Bhargava, Adv Arvind Ray, Adv Apoorva Jain, Adv Divya Yadav, M/S Khaitan & Co.
