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Informist, Friday, Jul 19, 2024

 

NEW DELHI – The Delhi High Court has rejected Steel Authority of India Ltd's petition against an arbitral award favouring Noble Chartering Inc. In 2017, an arbitral tribunal awarded Noble Chartering a sum of $8.6 mln, along with interests, payable by the Steel Authority of India.

 

The award had an interest rate of 3% from the date of termination of the contract between the parties in 2013 till the date of the award, to be paid in three months. It also gave future interest at the rate of 9% per annum on the awarded amount in the event the same was not paid within three months from the date of the award. 

 

The high court said the interest rate of 3?n't be called either perverse or unreasonable. "We are also unable to accept that the award of future interest at the rate of 9% on the awarded amount conflicts with the public policy of India," it said.

 

The case arose out of a contract of affreightment, entered between Noble Chartering as owners and Steel Authority of India as charterers, for shipment of coking coal from ports in the US to those in India for a shipment period of three years from September 2008 to August 2011. After some disputes between the parties, they moved the arbitration tribunal in 2016. 

 

In 2019, a single judge of the Delhi High Court partially set aside the arbitral award and reduced the damages to be given to Noble Chartering. The single judge also allowed the objection raised by Steel Authority regarding the rate of interest awarded on the awarded amount. Consequently, cross-appeals were filed by both parties before the division bench of the court. Steel Authority filed the plea to set aside the arbitral award, whereas Noble Chartering filed a petition seeking the upholding of the original arbitral award.

 

At 1101 IST, shares of Steel Authority of India traded 3.8% lower at 142.25 rupees on the National Stock Exchange.  End

 

US$1 = 83.61 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Namrata Rao

 

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