LexDLF LTD. (FORMERLY KNOWN AS DLF UNIVERSAL LTD) AND ANR. versus KONCAR GENERATORS AND MOTORS LTD.
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[2024] 8 S.C.R. 291 : 2024 INSC 593 DLF Ltd. (Formerly Known as DLF Universal Ltd) and Anr. v. Koncar Generators and Motors Ltd. (Civil Appeal No. 7702 of 2019) 08 August 2024 [Pamidighantam Sri Narasimha* and Aravind Kumar, JJ.] Issue for Consideration The issue arising in the present appeal relates to enforcement of an arbitral award expressed in foreign currency. In this context, two questions arise for consideration. First, what is the correct and appropriate date to determine the foreign exchange rate for converting the award amount expressed in foreign currency to Indian rupees. Second, what would be the date of such conversion, when the award debtor deposits some amount before the court during the pendency of proceedings challenging the award. Headnotes† Arbitration and Conciliation Act, 1996 – Arbitral Award – Enforcement of an arbitral award expressed in foreign currency – What is the correct and appropriate date to determine the foreign exchange rate for converting the award amount expressed in foreign currency to Indian rupees: Held: The statutory scheme of the Act makes a foreign arbitral award enforceable when the objections against it are finally decided – Therefore, as per the Act and the principle in Forasol case, the relevant date for determining the conversion rate of foreign award expressed in foreign currency is the date when the award becomes enforceable. [Para 20(i)] Arbitration and Conciliation Act, 1996 – Arbitral Award – Enforcement of an arbitral award expressed in foreign currency – What would be the date of such conversion, when the award debtor deposits some amount before the court during the pendency of proceedings challenging the award: Held: When the award debtor deposits an amount before the court during the pendency of objections and the award holder is permitted to withdraw the same, even if against the requirement of * Author 292 [2024] 8 S.C.R. Digital Supreme Court Reports security, this deposited amount must be converted as on the date of the deposit – After the conversion of the deposited amount, the same must be adjusted against the remaining amount of principal and interest pending under the arbitral award – This remaining amount must be converted on the date when the arbitral award becomes enforceable, i.e., when the objections against it are finally decided. [Para 20(ii)(iii)] Arbitration and Conciliation Act, 1996 – Appellants are Indian companies and the respondent is a Croatian company – Dispute arose between the parties – Matter referred to arbitration before the International Chamber of Commerce – Arbitral tribunal passed its award dated 12.05.2004 in favour of the respondent-claimant – Appellants then filed objections against the award u/s. 48 – The appellants deposited Rs. 7.5 crores with the Executing Court on 22.10.2010 – Trial Court dismissed the objections filed u/s. 48 – Appellants filed a revision, which the High Court admitted by order dated 03.06.2011 – The High Court stayed the operation of the Trial Court order dismissing objections, subject to the appellants depositing a further amount of Rs. 50 lakhs, in addition to Rs. 7.5 crores, with the Executing Court – The revision came to be dismissed by the High Court on 01.07.2014, by which the award attained finality as this order was not challenged any further – What would be relevant conversion date of the amount: Held: The deposit of Rs. 7.5 crores was permitted for withdrawal by furnishing a bank guarantee – So, the first deposit of Rs. 7.5 crores must be converted as on the date of deposit being 22.10.2010 – The second deposit of Rs. 50 lakhs pursuant to the High Court order dated 03.06.2011 stands on a different footing from the first deposit – This order did not permit the respondent to withdraw this amount till the completion of the proceedings – Hence, the amount cannot be converted as on the date of deposit as the respondent could not have benefitted from the same – Here, the revision proceedings were complete on 01.07.2014 – Thus, the second deposit of Rs. 50 lakhs as well as the remaining amount due under the award must be converted when the objections proceedings attained finality on 01.07.2014 – The Executing Court, being the Additional District Judge cum Commercial Court, must determine the amount payable by taking into account the exchange rate as on 01.07.2014. [Paras 11.2, 18, 19, 21] [2024] 8 S.C.R. 293 DLF Ltd. (Formerly
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