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Arbitral Award – Enforcement in foreign currency – Section 49 of the Arbitration Act

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In this case, two important questions arose – first what the correct and appropriate date is to determine the foreign exchange rate for converting the award amount expressed in foreign currency to Indian rupees and second what would be the date of such conversion.

Appellants – Indian companies and the Respondent – Croatian Company had entered the contract.   The disputes were referred to the International Chamber of Commerce, Paris.   The Arbitral Award was passed on 12.5.2004 in favour of the respondent -claimant for Euros 10,93,989 with interest.

The execution petition was filed in 2010.   The first deposit of Rs.7.5 crores was made on 22.10.2010 in the execution petition.   The execution petition was allowed by the trial Court vide order dated 3.2.2017 holding that the relevant date to convert the award amount is 1.7.2014 i.e. the date on which all the objections against the award were finally decided. No further appeal was filed and hence, it attained finality.

HELD that the relevant date for determining conversion rate of foreign award in foreign currency is the date on which the award becomes final and enforceable.  The deposits made by the award debtor during the pendency of objections and permitted to be withdrawn by the award holder, this deposited amount must be converted as on the date of the deposit. After conversion of the deposited amount and adjustment, the remaining principal and interest amount must be converted on the date when the arbitral award becomes final and enforceable.

Judgment dated 8.8.2024 of the Supreme Court in Civil Appeal No.7702 of 2019 of DLF Ltd (formerly known as DLF Universal Ltd) Vs. Koncar Generators and Motors Ltd.

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