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Informist, Thursday, Oct. 1, 2026

 

--SAIL moves SC over INR-4.6-bln arbitral award in favour of British Marine

 

NEW DELHI – Steel Authority of India Ltd. has moved the Supreme Court against a Delhi High Court's Sept. 17 order that upheld an INR-4.61-billion arbitral award in favour of British Marine PLC., the former informed the Delhi High Court in a hearing. However, there is no stay on the arbitral award by the Supreme Court in this matter, said Steel Authority of India.

 

Thursday, the high court refused to allow British Marine to withdraw INR 2.13 billion deposited by SAIL in the court's registry. The high court said that the arbitral award would not be executable as it is not stamped, hence, the deposited amount cannot be given to British Marine. However, British Marine would be at liberty to take steps to bring the original arbitral award and present the same before the court, it said. After completing the necessary formalities in respect of payment of stamp duty as per law, the arbitral award can be enforced, it said. Only thereafter, British Marine can move a fresh application for release of INR 2.13 billion, it added.

 

The high court directed for the release of INR 170.93 million bank guarantee, given by British Marine. The guarantee was given so that British Marine could withdraw an equal amount of money from SAIL's deposited arbitral award in the case. However, the remaining amount of INR 2.13 billion was not allowed to be released to British Marine by the high court since the award was not stamped. 

 

The case has its genesis from the Ministry of Ports, Shipping and Waterways of India's division Transchart floating an enquiry in 2007 for shipping of coking coal from Australia and New Zealand to various ports in India including Vishakhapatnam. British Marine had expressed its interest which led to the execution of a contract. 

 

In 2008, various booking orders were issued by SAIL from different ports in Australia to India. Thereafter, SAIL informed British Marine that it would not be in a position to declare any more booking orders in view of the global economic situation and unpredictable market conditions. In 2010, SAIL asked Transchart to inform British Marine that it would not be able to meet its commitments under the contract and was invoking the default clause to terminate the contract without liability on either side. Certain further quantities were agreed for shipment between the parties in May 2011. However, thereafter no other booking orders were issued. 

 

Thereafter, SAIL alleged that there was a breach of contract by British Marine and a termination letter was issued in 2012. Disputes arose between the parties which led to the constitution of a three-member arbitral tribunal, which awarded INR 4.61 billion to British Marine. The arbitral award was upheld by both the single judge and division bench of the high court. While hearing the challenge to the arbitral award, the high court had asked SAIL to deposit 50% of the arbitral award amount with the court's registry to proceed with the case. 

 

The division bench of the high court said that the arbitral tribunal had correctly interpreted the default clause to mean that if there were any events that resulted in constituting frustration of the agreement, leading to a situation where the supplier in Australia is unable to supply, then the contract can be terminated. In order to invoke the default clause, SAIL would have to show that its suppliers had failed to supply goods to them and therefore, the same resulted in non-issuance of booking order to British Marine, it said. However, such a situation did not arise and hence, the default clause could not have been invoked by SAIL, it said. The interpretation given by SAIL to the default clause is completely contrary to the bare reading of the clause itself, it added.

 

At 1334 IST, the shares of Steel Authority of India Ltd. were down 4.9% at INR 172.58 on the National Stock Exchange.  End

 

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

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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