𝐀𝐚𝐝𝐫𝐢𝐤𝐚𝐚 𝐋𝐞𝐠𝐚𝐥 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬 (𝐀𝐋𝐒)

Category: Delhi High Court

Delhi HC on Scope of IP-I Registration, Telecom Licensing, and Arbitral Award Review under Section 34 of the Arbitration and Conciliation Act, 1996
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

Date: 13.08.2026

Delhi HC on Scope of IP-I Registration, Telecom Licensing, and Arbitral Award Review under Section 34 of the Arbitration and Conciliation Act, 1996

This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email id shobhit.Ica23@gmail.com .

The Delhi High Court recently delivered a significant judgment in the case between the Union of India (Department of Telecommunications) and Sterlite Technologies Limited, addressing complex issues around telecom infrastructure licensing, regulatory compliance, and the scope of arbitral review. This article provides a detailed analysis of the dispute, the legal arguments, and the implications of the court’s decision.

Background of the Dispute

Sterlite Technologies Limited (STL), a leading provider of digital network solutions, was granted an Infrastructure Providers Category-I (IP-I) Registration Certificate by the Department of Telecommunications (DoT). This certificate authorized STL to provide passive telecom infrastructure, such as fiber ducts and related facilities, but explicitly barred it from dealing with active telecom equipment or providing end-to-end bandwidth services, which require a separate telecom service provider (TSP) license.

STL, through its wholly owned subsidiary Speedon Network Limited (SNL), entered into Master Service Agreements (MSAs) with various TSPs, notably Citycom Networks and Microscan Computers. The payment structure under these agreements was based on subscriber base and revenue sharing, rather than traditional lease rentals for passive infrastructure. The DoT alleged that STL, via these arrangements, was effectively functioning as a TSP without the necessary license, thereby violating the terms of its IP-I registration and causing loss of government revenue.

Key Events Leading to Arbitration
1. Inspection and Allegations:
  - In February 2015, DoT inspected STL’s premises in Pune and concluded that STL was operating beyond its permitted scope by selling bandwidth and managing active equipment through SNL.
  - The inspection report alleged unauthorized services and revenue evasion exceeding Rs. 2.5 crores.
2. Correspondence and Show Cause Notice:
  - STL provided detailed responses, clarifying that active equipment belonged to the TSPs, not STL or SNL.
  - In July 2018, DoT issued a show cause notice for violation of IP-I terms, followed by a demand notice in August 2020 for Rs. 8.55 crores.
3. Arbitration Proceedings:
  - STL challenged the demand, invoking the arbitration clause in the IP-I certificate.
  - The arbitrator ruled in favor of STL, declaring the demand notice illegal, arbitrary, and unjustified.
Legal Arguments Presented

Union of India (Petitioner)
- Ownership and Operation: Argued that STL and SNL, as related entities, owned and operated active equipment without a license, and that billing based on bandwidth proved provision of end-to-end services.
- Damages: Claimed inherent right to seek damages for breach of registration terms, even without explicit contractual provisions.
Sterlite Technologies Limited (Respondent)
- Separation of Entities: Emphasized that SNL and STL are legally distinct, with SNL holding its own IP-I registration and later a unified license.
- Scope of Services: Asserted that STL only provided passive infrastructure, with active equipment and bandwidth services managed and billed by the TSPs.
- Contractual Interpretation: Highlighted that the MSAs and subsequent novation agreements clarified the roles and responsibilities, limiting STL to passive infrastructure.
Court’s Analysis and Findings

The High Court, upholding the arbitrator’s award, made several key observations:
1. Scope of IP-I Registration:
  - The regulatory framework and the IP-I certificate clearly prohibit IP-I holders from providing active services or end-to-end bandwidth.
  - The evidence showed STL provided only passive infrastructure, with TSPs responsible for active equipment and subscriber services.
2. Ownership of Equipment:
  - The court found no conclusive proof that STL owned or operated active equipment. Lease agreements and correspondence supported STL’s position.
3. Billing and Revenue Model:
  - The MSAs did not establish that STL’s charges were based on bandwidth utilization by end subscribers. The arbitrator’s factual findings on this point were upheld.
4. Legal Entity Distinction:
  - SNL and STL were recognized as separate legal entities, each with distinct registrations and licenses. The court rejected the argument that SNL was merely a façade for STL.
5. Demand Notice Validity:
  - The demand notice lacked statutory backing, as there was no provision in the IP-I certificate or the Indian Telegraph Act for such a penalty. The court emphasized that damages under Section 73 of the Indian Contract Act require proof of actual loss, which was absent.
6. Scope of Judicial Review:
  - The court reiterated the limited scope of interference under Section 34 of the Arbitration and Conciliation Act, stating that plausible views taken by arbitrators should not be disturbed unless they are patently illegal or contrary to public policy.
Implications of the Judgment
- Regulatory Clarity: The judgment reinforces the distinction between passive infrastructure providers and licensed TSPs, providing clarity for industry participants.
- Arbitral Autonomy: It underscores the judiciary’s deference to arbitral awards, limiting court intervention to narrow grounds.
- Contractual Precision: The case highlights the importance of clear contractual definitions and compliance with regulatory frameworks in the telecom sector.
Conclusion

The Delhi High Court’s decision in Union of India vs. Sterlite Technologies Limited sets an important precedent for telecom infrastructure regulation and the enforcement of arbitral awards. By upholding the arbitrator’s reasoned findings and emphasizing the limits of judicial review, the court has provided valuable guidance for both industry stakeholders and legal practitioners.

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Source: Delhi High Court

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August 13, 2026
Delhi High Court Sets Aside Arbitral Award Due to Unilateral Appointment of Arbitrator by Government Authority
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

Date: 11.08.2026

Delhi High Court Sets Aside Arbitral Award Due to Unilateral Appointment of Arbitrator by Government Authority

This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email id shobhit.Ica23@gmail.com .

The Delhi High Court recently delivered a significant judgment in the case of Union of India vs. M/S Goodrich Foodtech Ltd., addressing crucial issues surrounding the unilateral appointment of arbitrators in government contracts. This article provides a comprehensive overview of the dispute, the arbitral proceedings, the legal principles involved, and the implications of the Court’s decision.

Background of the Dispute
1. Tender and Contract Formation
  - The Union of India invited bids for the supply of 1,390 MT of malted milk food with cocoa for the Defence sector for the year 2017-18.
  - M/S Goodrich Foodtech Ltd. emerged as the successful bidder, leading to five separate but identical contracts, each specifying delivery periods and quantities.
  - The respondent furnished performance bank guarantees totaling Rs. 2,49,87,020/- as per contract requirements.
2. Emergence of Disputes
  - After partial fulfillment of the contracts, the Union of India issued a defect notice, alleging the supplied product contained soya protein and non-milk fat (palm oil), contrary to contract specifications.
  - This led to show-cause notices, termination of four contracts, forfeiture and encashment of bank guarantees, and debarment of Goodrich Foodtech Ltd. from future procurements.
3. Arbitration Proceedings
  - Goodrich Foodtech Ltd. invoked the arbitration clause, and a sole arbitrator was appointed by the Competent Financial Authority (CFA) of the Ministry of Defence.
  - The arbitrator ruled largely in favor of Goodrich Foodtech Ltd., awarding substantial sums and quashing the termination, forfeiture, and debarment actions.
Key Legal Issues Examined

1. Unilateral Appointment of Arbitrator
- The core issue was whether the appointment of the sole arbitrator by the CFA (an official of the Union of India, a party to the dispute) was valid under Section 12(5) of the Arbitration and Conciliation Act, 1996.
- The Court examined whether mere participation in arbitration or lack of objection constituted a waiver of the right to challenge such an appointment.
2. Waiver under Section 12(5) of the Arbitration Act
- The Court relied on Supreme Court precedents, emphasizing that a waiver of ineligibility under Section 12(5) must be an “express agreement in writing” after the dispute has arisen.
- Conduct, participation, or implied consent does not amount to a valid waiver.
3. Jurisdiction and Validity of Arbitral Award
- The Court held that an award passed by an ineligible, unilaterally appointed arbitrator is a nullity and can be set aside under Section 34 of the Act.
- Even the party that made the unilateral appointment retains the right to challenge the award on this ground.
Court’s Findings and Decision
- The Court found that the appointment of the arbitrator by the CFA, an official of the Ministry of Defence, was in violation of Section 12(5) and the Seventh Schedule of the Arbitration Act.
- There was no express written waiver by both parties after the dispute arose.
- The arbitral award was declared void ab initio and set aside.
Implications of the Judgment
1. Reinforcement of Party Autonomy and Neutrality
  - The judgment reinforces the principle that both parties must have an equal say in the appointment of arbitrators, ensuring neutrality and fairness in arbitral proceedings.
2. Strict Compliance with Section 12(5)
  - Any arbitration agreement allowing unilateral appointment of arbitrators is invalid unless expressly waived in writing after the dispute arises.
  - Participation in proceedings or silence does not constitute a waiver.
3. Impact on Government Contracts
  - Government agencies must review and revise standard arbitration clauses to comply with the law and avoid similar pitfalls.
  - Awards rendered by unilaterally appointed arbitrators are vulnerable to being set aside, even if both parties participated in the proceedings.
Conclusion

The Delhi High Court’s decision in Union of India vs. Goodrich Foodtech Ltd. is a landmark ruling that clarifies and strengthens the legal framework governing the appointment of arbitrators in India. It underscores the necessity for express, written waivers and equal participation in the appointment process, setting a precedent for future contractual and arbitral practices, especially in government procurement.

Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

Source: Delhi High Court

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August 11, 2026
Quashing of Criminal Proceedings under the Food Safety and Standards Act, 2006
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

Date: 10.08.2026

Quashing of Criminal Proceedings under the Food Safety and Standards Act, 2006

This Short Article has been prepared & written by Advocate Madhumita Jha-Bombay High Court. The views expressed are based on her interpretation of the law. She can be reached at her email id jhamadhumita27@gmail.com .

A recent judgment by the Delhi High Court has brought closure to long-standing criminal proceedings against various parties involved in the sale and distribution of MAGGI Noodles, stemming from the nationwide food safety controversy of 2015. This article provides a detailed overview of the case, the legal arguments, and the court’s reasoning that led to the quashing of the prosecutions.

Background: The MAGGI Noodles Controversy

In May 2015, Food Safety Officers in Delhi collected samples of MAGGI Noodles from retail outlets as part of a nationwide sampling exercise. The samples were tested, and initial reports from the Food Analyst indicated that the lead content in the masala tastemaker exceeded the permissible limit of 2.5 ppm. Additionally, some samples were alleged to be misbranded due to the “No Added MSG” label.

These findings led to criminal complaints against retailers, suppliers, and the manufacturer, Nestlé India Limited, under the Food Safety and Standards Act, 2006 (FSS Act). The accused sought to quash these proceedings, arguing that the basis for prosecution was no longer valid.

Legal Proceedings and Arguments

Petitioners’ Submissions
1. Invalidity of Laboratory Reports: Petitioners argued that the prosecution relied solely on Food Analyst reports from laboratories that were neither NABL accredited nor notified under Section 43 of the FSS Act, as required by law. This position was supported by the Bombay High Court’s 2015 judgment, which set aside the nationwide ban on MAGGI Noodles for similar reasons.
2. Subsequent Testing and Judicial Findings: Following the Bombay High Court’s directions, fresh samples were tested by accredited laboratories, all of which found the lead content within permissible limits. The Supreme Court also directed testing by the Central Food Technological Research Institute (CFTRI), which confirmed the product’s safety.
3. Supersession of State Laboratory Reports: Under Section 46(4) of the FSS Act, the Referral Food Laboratory’s report supersedes the Food Analyst’s report. Since the Referral Laboratory found the product compliant, the original reports lost evidentiary value.
4. Abuse of Process: Petitioners contended that continuing the prosecution would be an abuse of the court’s process, as the scientific foundation of the case had been undermined by subsequent findings and judicial pronouncements.
State’s Submissions
1. Procedural Compliance: The State argued that all sampling and testing procedures were followed as per the FSS Act, and the accused had the opportunity to seek referral analysis but did not exercise this right.
2. Validity of State Laboratory: The State maintained that, under transitional provisions, State Food Testing Laboratories could continue functioning until formal notification and accreditation, which was later obtained.
3. Independence of Criminal Proceedings: The State asserted that the criminal complaints were independent and should proceed to trial, as the issues involved required evidence and could not be decided summarily.
Court’s Analysis and Findings

The High Court examined the entire sequence of events and legal developments:
1. Judicial Scrutiny of Laboratory Reports: The Bombay High Court and Supreme Court had already scrutinized the validity of the laboratory reports and directed fresh testing by accredited and notified laboratories.
2. Referral Laboratory Findings: The CFTRI, a Referral Laboratory, found the lead content within permissible limits. The Supreme Court directed that these findings should form the basis for adjudication.
3. Erosion of Prosecution’s Foundation: The court noted that the prosecution was based solely on the original Food Analyst’s reports, which had been superseded and discredited by subsequent scientific and judicial review.
4. Abuse of Process: Continuing the criminal proceedings would serve no useful purpose and would amount to an abuse of the court’s process, as the very foundation of the prosecution had eroded.
The court also referenced similar decisions by the Himachal Pradesh and Uttarakhand High Courts, which quashed prosecutions arising from the same controversy.

Conclusion and Impact

The Delhi High Court allowed the petitions, quashing the criminal complaints, summoning orders, and all consequential proceedings. This judgment reinforces the importance of scientific rigor, statutory compliance, and judicial oversight in food safety prosecutions. It also provides clarity for businesses and consumers regarding the standards and processes that must be followed in such cases.

The decision marks a significant closure to the MAGGI Noodles controversy, emphasizing that prosecutions cannot continue when their scientific and legal basis has been invalidated by subsequent authoritative findings.

Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

Source: Delhi High Court

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August 10, 2026
Delhi High Court: No Customs Duty Recoverable Without Specific Demand in Show Cause Notice
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

Date: 03.08.2026

Delhi High Court: No Customs Duty Recoverable Without Specific Demand in Show Cause Notice

This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .

The Delhi High Court’s decision in Commissioner of Customs v. R.K. International addresses a crucial question in customs law: Can customs duty be recovered on confiscated goods when the show cause notice does not specifically demand it? This article breaks down the facts, legal reasoning, and implications of the case for importers, customs authorities, and legal practitioners.

Background of the Case
1. Seizure and Confiscation
  - Imported computer components valued at ₹28,29,550 were seized from R.K. International for alleged legal violations.
  - A show cause notice under Section 124 of the Customs Act was issued, proposing confiscation.
  - The final order confirmed confiscation but allowed redemption of goods upon payment of a fine (₹5 lakh, of which ₹4 lakh was paid), plus an additional penalty of ₹1 lakh.
2. Revenue’s Appeal
  - The Revenue (Customs Department) appealed, arguing that customs duty should also be recovered under Section 125(2) of the Customs Act, even though the show cause notice did not specifically demand it.
  - The Revenue relied on the Supreme Court’s decision in Commissioner of Customs v. Jagdish Cancer and Research Centre, which held that when goods are confiscated and redemption is allowed, the importer must pay duty and charges.
Legal Issues Considered
- Key Question: Is the Revenue entitled to recover customs duty under Section 125(2) on confiscated goods when the show cause notice does not specifically propose such a demand?
Court’s Analysis and Reasoning
1. Requirement of Specific Demand in Show Cause Notice
  - The Tribunal and the High Court emphasized that a show cause notice must clearly state any proposal for the levy of customs duty.
  - In the Jagdish Cancer and Research Centre case, the show cause notice explicitly proposed the recovery of customs duty, which was crucial to the Supreme Court’s decision.
  - The High Court held that the absence of a specific demand for customs duty in the show cause notice means the importer cannot be held liable for such duty later.
2. Role of the Adjudicating Officer
  - The Adjudicating Officer is responsible for assessing the value of the goods and indicating the duty payable at the time of issuing the show cause notice.
  - Even if the final duty amount may change after adjudication, a tentative assessment must be included in the notice to give the importer an opportunity to defend themselves.
3. Mandatory Nature of Section 125(2)
  - While Section 125(2) is mandatory in requiring payment of duty when goods are redeemed, this obligation arises only if the duty is properly assessed and demanded in the show cause notice.
  - The Court clarified that the law does not allow customs authorities to recover duty that was never assessed or demanded in the first place.
Outcome and Implications
- The High Court answered the legal question against the Revenue and dismissed the appeal.
- Key Takeaways:
  1. Customs authorities must explicitly propose the recovery of duty in the show cause notice when confiscating goods and offering redemption.
  2. Importers cannot be made liable for customs duty unless they are given clear notice and an opportunity to respond.
  3. The decision reinforces procedural fairness and due process in customs adjudication.
Practical Impact
- For Importers:
  - Provides protection against retrospective or implied demands for customs duty.
  - Ensures that all liabilities are clearly communicated at the outset.
- For Customs Authorities:
  - Highlights the importance of drafting comprehensive show cause notices that include all proposed liabilities.
  - Failure to do so may result in loss of revenue and unsuccessful appeals.
- For Legal Practitioners:
  - Serves as a precedent for challenging demands not specifically raised in show cause notices.
  - Emphasizes the need to scrutinize the contents of notices and orders in customs proceedings.
This case underscores the necessity for clarity and procedural rigor in customs enforcement, ensuring that both the state and importers are treated fairly under the law.

Connected Matter

CESTAT Bangalore Orders Refund of Customs Duty on Destroyed Imports: Clarifies Duty as Deposit When No Clearance for Home Consumption

Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

Source: Delhi High Court

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August 3, 2026
Delhi High Court Sets Aside Arbitral Award for Breach of Natural Justice and Procedural Fairness
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

Date: 30.07.2026

Delhi High Court Sets Aside Arbitral Award for Breach of Natural Justice and Procedural Fairness

This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email id shobhit.Ica23@gmail.com .

This article provides a comprehensive overview of the high-profile arbitration dispute between HPCL Mittal Pipeline Limited (HMPL) and Coastal Marine Construction and Engineering Limited (CMCEL), as adjudicated by the Delhi High Court in May 2025. The case highlights critical issues in contract management, arbitration procedure, and the principles of natural justice in Indian law.

Background and Contractual Dispute
1. Project Overview
  - HMPL operates a 1024 km pipeline from Mundra Port, Gujarat to Bathinda, Punjab, serving a major oil refinery.
  - In 2012, HMPL awarded CMCEL a two-year contract for the operation and maintenance of its Single Point Mooring (SPM) terminal.
2. Emergence of Disputes
  - Performance issues led HMPL to issue show cause notices and ultimately terminate the contract in November 2012.
  - The contract was then awarded to a third-party agency.
  - Unresolved disputes triggered arbitration proceedings as per the contract’s dispute resolution clause.
Arbitration Proceedings and Claims

HMPL’s Claims

HMPL sought compensation for various losses and damages, including:
- Demurrage and Port Charges: Over Rs. 3.3 crore for delays and operational inefficiencies.
- Replacement Costs: Expenses for damaged floating and sub-sea hose strings, accessories, and supervision charges.
- Other Expenses: Charges for hiring vessels, replacing equipment, and additional costs from engaging a new contractor (over Rs. 12 crore).
- Refund of Advance: Rs. 56.9 lakh paid for incomplete work.
CMCEL’s Counter-Claims

CMCEL countered with claims totaling over Rs. 23 crore, including:
- Wrongful Termination: Rs. 16 crore for alleged unjust contract termination.
- Outstanding Invoices: Rs. 5 crore for unpaid dues.
- Performance Guarantee: Rs. 2.09 crore for a guarantee allegedly wrongfully encashed.
- Interest: 12% per annum on the above amounts.
The Arbitral Award and Its Challenge
- The majority of the Arbitral Tribunal awarded HMPL Rs. 16.4 crore (out of Rs. 19 crore claimed) and CMCEL Rs. 4.16 crore (out of Rs. 23 crore claimed), resulting in a net award of Rs. 12.25 crore to HMPL plus arbitration costs.
- Both parties challenged the award in the Delhi High Court:
  - CMCEL argued the award violated natural justice by disregarding its defense.
  - HMPL sought interest on its claims and enforcement of the award.
Key Legal Issues and Court Analysis

1. Natural Justice and Procedural Fairness
- The Tribunal treated CMCEL’s Statement of Defence (SOD) as deficient due to lack of a para-wise reply, effectively deeming HMPL’s claims admitted.
- The Court found this approach unjust, as CMCEL had filed a substantive, claim-wise defense and was never clearly instructed to provide a para-wise reply.
- The Tribunal’s failure to communicate procedural requirements or enforce them at the appropriate time was a critical procedural lapse.
2. Applicability of Civil Procedure Code (CPC) in Arbitration
- While arbitral tribunals are not bound by the CPC, they may adopt its principles if parties are notified in advance.
- In this case, the Tribunal did not notify parties of strict CPC application, making its reliance on CPC rules for pleadings inappropriate.
3. Consideration of Defenses and Evidence
- The majority award largely ignored CMCEL’s defenses, focusing only on HMPL’s claims and evidence.
- The dissenting arbitrator and the Court emphasized that pleadings should be read holistically, and that both parties’ arguments and evidence must be considered.
4. Remedies and Outcome
- The Court set aside the arbitral award, finding a violation of natural justice and procedural fairness.
- Both parties were allowed to re-agitate their claims and counter-claims in accordance with the law.
Lessons and Implications
1. Importance of Clear Procedural Directions
  - Arbitral tribunals must clearly communicate procedural requirements and enforce them consistently.
2. Holistic Consideration of Pleadings
  - Awards based on technicalities rather than substance risk being set aside for violating natural justice.
3. Judicial Oversight in Arbitration
  - Courts will intervene in arbitral awards where fundamental procedural fairness is compromised, even within the limited scope of Section 34 of the Arbitration and Conciliation Act.
Conclusion

The HMPL vs. CMCEL case underscores the necessity for arbitral tribunals to balance procedural flexibility with fairness and transparency. It serves as a cautionary tale for parties and arbitrators alike, emphasizing that substance must prevail over form, and that the right to be heard is paramount in any dispute resolution process.

Source: Delhi High Court

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July 30, 2026
Delhi High Court on Arbitration Award, Contractual Interpretation, and Damages in Charterparty Disputes
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

Date: 25.07.2026

Delhi High Court on Arbitration Award, Contractual Interpretation, and Damages in Charterparty Disputes

This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email id shobhit.Ica23@gmail.com .

The Delhi High Court recently delivered a significant judgment in the case between Steel Authority of India Limited (SAIL) and British Marine PLC, addressing complex issues of arbitration, contractual interpretation, and damages in the context of international shipping agreements. This article provides a comprehensive overview of the dispute, the legal arguments, and the broader implications for commercial contracts and arbitration in India.

Background: The Contract and the Dispute
1. Parties Involved:
  - SAIL: India’s largest steel producer, regularly importing coking coal for its operations.
  - British Marine PLC: An international ocean freight company specializing in bulk cargo shipping.
2. The Contract:
  - In December 2007, SAIL (through Transchart, a government shipping agency) entered into a five-year Contract of Affreightment (COA) with British Marine for the shipment of 3 million metric tons (MT) of coking coal from Australia to India.
  - The contract included detailed clauses on vessel nomination, shipment schedules, force majeure, default, and arbitration.
3. The Dispute:
  - Following the 2008 global financial crisis, SAIL’s demand for coking coal dropped, leading to reduced shipments.
  - SAIL eventually terminated the contract in 2012, citing force majeure and other operational difficulties.
  - British Marine claimed wrongful termination and sought damages for lost freight opportunities.
Arbitration Proceedings
- A three-member arbitral tribunal was constituted as per the contract’s arbitration clause.
- British Marine claimed over $55 million in damages, while SAIL argued that the contract allowed termination without liability under certain conditions (notably, the Default Clause 62).
- The tribunal ruled in favor of British Marine, awarding damages and interest.
Key Legal Issues Examined

1. Impartiality and Independence of Arbitrators
- SAIL challenged the appointment of two arbitrators, alleging “issue conflict” because they had previously interpreted a similar contract clause in another arbitration involving SAIL.
- The Court held that prior involvement in similar disputes does not automatically disqualify arbitrators unless there is concrete evidence of bias or lack of impartiality. The mere fact of having ruled on similar issues before, especially in specialized industries, is not sufficient for disqualification.
2. Interpretation of the Default Clause (Clause 62)
- SAIL argued that Clause 62 allowed it to terminate the contract without liability for any reason, including its own operational difficulties.
- The tribunal and the Court disagreed, holding that the clause was intended for situations where the supplier (not SAIL itself) failed to provide material, or where performance was frustrated by events beyond control. Termination for reasons outside these specific grounds was not protected by the clause.
3. Force Majeure
- SAIL claimed that force majeure events (such as floods in Australia) justified non-performance and termination.
- The Court found that SAIL did not properly invoke the force majeure clause as per contractual requirements (such as timely notice and supporting documentation), and in fact continued to perform parts of the contract after the alleged force majeure period.
4. Damages and Proof of Loss
- The tribunal awarded damages based on the difference between the contract freight rate and the spot market rate for similar shipments during the period of breach.
- The Court upheld this approach, noting that British Marine had provided sufficient evidence of loss and that SAIL’s failure to declare shipment stems constituted a breach.
- The Court also clarified that damages are not meant to provide a windfall, but to place the injured party in the position it would have been in had the contract been performed.
5. Interest Awarded
- SAIL objected to the tribunal’s award of interest at different rates for pre- and post-award periods.
- The Court held that this was within the tribunal’s discretion and consistent with Indian arbitration law.
Broader Implications
- Arbitrator Selection: The judgment reinforces that expertise and prior experience in similar disputes do not, by themselves, disqualify arbitrators in specialized fields.
- Contract Drafting: Parties must draft force majeure and default clauses with precision and follow procedural requirements strictly to rely on them in disputes.
- Damages Calculation: The decision affirms the principle that damages should reflect actual loss, supported by market evidence, and that the burden of proof lies with the claimant.
- Judicial Review of Arbitral Awards: The Court reiterated the limited scope for judicial interference in arbitral awards, especially in international commercial arbitration, unless there is patent illegality or violation of fundamental policy.
Conclusion

The Delhi High Court’s judgment in SAIL vs. British Marine PLC is a landmark in clarifying the interpretation of contractual clauses, the standards for arbitrator impartiality, and the calculation of damages in commercial disputes. It underscores the importance of clear contract drafting, adherence to procedural requirements, and the autonomy of arbitral tribunals in resolving complex commercial matters.

Connected Matter

Supreme Court Interprets Section 12(5) of Arbitration Act

Source: Delhi High Court

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July 25, 2026
Delhi High Court on Anti-Arbitration Injunction in Maritime Dispute
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

Date: 24.07.2026

Delhi High Court on Anti-Arbitration Injunction in Maritime Dispute

This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email id shobhit.Ica23@gmail.com .

A significant judgment was delivered by the High Court of Delhi on March 13, 2026, in the case of SARR Freights Corporation & SARR Freights Limited v. Argo Coral Maritime Ltd. (CS(OS) 868/2025 & I.A. 30141/2025).

The dispute revolved around the continuation of two parallel arbitration proceedings in London under the London Maritime Arbitrators Association (LMAA), arising from a charterparty agreement for the shipment of military cargo to Sudan. The plaintiffs sought to restrain the defendant from pursuing these arbitrations, raising complex questions of contract law, arbitration, and jurisdiction.

Case Background
- Parties:
  - Plaintiffs: SARR Freights Corporation & SARR Freights Limited (Indian logistics companies)
  - Defendant: Argo Coral Maritime Ltd. (Owner of vessel MV Panthera J)
- Contract: Charterparty Agreement (Booking Note dated April 4, 2023) for transporting military equipment for the UN Peacekeeping Force in Sudan.
- Dispute: Due to war in Sudan and a force majeure event, the UN terminated the purchase order, and the plaintiffs cancelled the Booking Note. The defendant claimed damages for ‘dead freight’ and initiated two arbitrations in London.
- Relief Sought: Plaintiffs requested an injunction to restrain the defendant from continuing the London arbitrations, arguing lack of a valid arbitration agreement and privity of contract.
Key Legal Issues and Principles

1. Jurisdiction of Indian Civil Courts
- Section 9, CPC: Civil courts have jurisdiction over all civil matters unless expressly or impliedly barred.
- The court held that the choice of a foreign seat for arbitration does not automatically oust Indian courts’ jurisdiction, especially for anti-arbitration injunctions in exceptional cases (e.g., vexatious or oppressive proceedings).
- Section 20(c), CPC: The court found that part of the cause of action arose in New Delhi, giving it territorial jurisdiction.
2. Existence of a Binding Contract and Arbitration Clause
- The court examined the Booking Note, Fixture Recap, and correspondence, concluding:
  - There was a valid contract between the parties, with the defendant as the owner of the performing vessel.
  - The arbitration clause, though not expressly included in the Special Terms of the Booking Note, was present in the Fixture Recap and incorporated by conduct and mutual intention.
  - The omission of the arbitration clause in the Booking Note was deemed an inadvertent error, not a deliberate exclusion.
  - Commercial contracts should be interpreted to give effect to the parties’ intentions and business efficacy.
3. Principle of Kompetenz-Kompetenz
- The court reaffirmed that questions regarding the validity or scope of the arbitration agreement are primarily for the arbitral tribunal to decide (Section 16, Arbitration Act).
4. Anti-Arbitration Injunctions
- Such injunctions are exceptional remedies, granted only if the arbitration agreement is null, void, inoperative, or incapable of being performed (Section 45, Arbitration Act).
- The court found no evidence that the London arbitrations were vexatious, oppressive, or unconscionable.
- The plaintiffs failed to establish exceptional circumstances warranting judicial intervention.
5. Comity of Courts and Minimal Judicial Interference
- The court emphasized respect for the agreed arbitral process and the principle of minimal judicial interference, especially in international commercial arbitration.
Court’s Analysis and Findings
- Jurisdiction: The court had territorial jurisdiction as substantial parts of the cause of action arose in New Delhi.
- Contractual Relationship: There was privity of contract between the plaintiffs and the defendant, with the defendant being the owner of the performing vessel.
- Arbitration Agreement: The arbitration clause was valid and binding, incorporated through the Fixture Recap and the parties’ conduct.
- No Exceptional Circumstances: The plaintiffs could not prove that the arbitration proceedings were vexatious or oppressive. The court noted that the defendant’s initiation of two arbitrations was due to confusion over the correct contracting party, not procedural abuse.
- Respect for Arbitral Process: The court reiterated that the arbitral tribunal is the proper forum to decide on its own jurisdiction and the validity of the arbitration agreement.
Conclusion and Order
- The Delhi High Court dismissed the plaintiffs’ application for an anti-arbitration injunction.
- The court held that:
  - There is a valid arbitration agreement between the parties.
  - The court has jurisdiction but finds no exceptional grounds to restrain the London arbitration.
  - The merits of the underlying commercial dispute remain to be adjudicated in the appropriate forum.
Legal Significance

This judgment reinforces several key principles in Indian arbitration law:
1. Autonomy of Arbitration Agreements: Courts will uphold the parties’ choice to arbitrate, especially in international commercial contracts.
2. Limited Grounds for Judicial Intervention: Anti-arbitration injunctions are rare and require clear evidence of nullity, inoperability, or incapacity of the arbitration agreement.
3. Business Efficacy and Intent: Commercial contracts are interpreted to give effect to the parties’ intentions, even if there are drafting errors.
4. Respect for Arbitral Tribunals: The principle of Kompetenz-Kompetenz ensures that arbitral tribunals have the first say on their own jurisdiction.
Case Details at a Glance
- Court: High Court of Delhi at New Delhi
- Case Number: CS(OS) 868/2025 & I.A. 30141/2025
- Order Date: March 13, 2026
- Parties: SARR Freights Corporation & SARR Freights Limited (Plaintiffs) vs. Argo Coral Maritime Ltd. (Defendant)
- Presiding Judge: Hon’ble Ms. Justice Mini Pushkarna
This decision is a notable precedent for parties involved in international commercial arbitration, especially in the shipping and logistics sector, and clarifies the Indian judiciary’s approach to anti-arbitration injunctions.

Source: Delhi High Court

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July 24, 2026
Enforcement of Foreign Arbitral Awards under the Arbitration & Conciliation Act, 1996
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

Date: 23.07.2026

Enforcement of Foreign Arbitral Awards under the Arbitration & Conciliation Act, 1996

This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email id shobhit.Ica23@gmail.com .

This case is a significant milestone in the Indian legal landscape regarding the enforcement of foreign arbitral awards under the Arbitration & Conciliation Act, 1996. The judgment clarifies the obligations of Indian courts when faced with objections to the enforcement of such awards and reinforces India’s pro-enforcement stance in line with international conventions.

Factual Background

Naval Gent Maritime Limited, the Decree Holder, sought enforcement of a foreign arbitral award dated 22 January 2001 against Shivnath Rai Harnarain (I) Ltd. The award was made in England under a Charter Party Agreement containing an arbitration clause. The Decree Holder submitted all required documents, including a certified copy of the award, the arbitration agreement, and proof that no appeal was filed in England.

The Judgment Debtor appeared in court but failed to file a formal response or objections under Section 48 of the Arbitration & Conciliation Act, 1996, despite multiple opportunities. The matter proceeded to arguments on enforceability.

Key Legal Issues Raised
1. Binding Nature of the Award: The Judgment Debtor argued that the award was not binding under English law (Section 66 of the English Arbitration Act, 1996) and thus not enforceable in India.
2. Public Policy Objection: It was contended that the award was contrary to Indian public policy, as the contract was allegedly executed under duress.
3. Stamping and Registration: The Judgment Debtor claimed the award was not stamped as per Indian law and thus unenforceable.
Court’s Analysis and Findings

1. Binding Nature of the Award

The court held that the enforceability of a foreign award in India is governed by Indian law, not the procedural requirements of the country where the award was made. Since the award was not challenged in England and the limitation period for appeal had expired, the award was deemed binding. Section 66 of the English Arbitration Act was found irrelevant for enforcement proceedings in India.

2. Public Policy Exception

The court examined the arbitrator’s findings on the alleged duress. The arbitrator had considered the evidence and concluded that while there was commercial pressure, it did not amount to legal duress sufficient to void the contract. The court emphasized that it cannot re-examine the arbitrator’s factual findings and that the public policy exception under Section 48(2) is to be narrowly construed.

3. Stamping and Registration

Relying on Supreme Court precedents, the court clarified that foreign awards do not require stamping or registration under Indian law for enforcement. The objections based on non-stamping were rejected.

Legal Principles Established
- Enforcement of Foreign Awards: Indian courts must enforce foreign arbitral awards if the requirements of Sections 47 and 48 of the Arbitration & Conciliation Act, 1996 are met.
- Limited Grounds for Refusal: Refusal to enforce can only be based on specific grounds enumerated in Section 48, such as incapacity, invalid agreement, lack of proper notice, or violation of public policy.
- No Re-examination of Merits: Courts cannot sit in appeal over the arbitrator’s findings on facts or law, especially on mixed questions like duress.
- No Requirement for Stamping/Registration: Foreign awards are not subject to Indian stamp or registration laws for enforcement purposes.
Outcome

The High Court of Delhi held the foreign award executable in India. The Decree Holder was permitted to encash the bank guarantee and pursue further execution if necessary.

Significance

This judgment strengthens India’s reputation as an arbitration-friendly jurisdiction and provides clarity on the enforcement of foreign arbitral awards. It limits the scope for challenging such awards, ensuring that India remains compliant with its international obligations under the New York Convention.

This case serves as a reference point for parties seeking to enforce foreign arbitral awards in India, highlighting the limited and well-defined grounds on which enforcement can be resisted.

Source: Delhi High Court

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July 23, 2026
Delhi High Court Strikes Down Retrospective Withdrawal of Export Incentives
Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation

Date: 04.07.2026

Delhi High Court Strikes Down Retrospective Withdrawal of Export Incentives

This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .

A recent judgment by the Delhi High Court has significant implications for exporters and the administration of export incentive schemes in India. The case, involving Malik Tanning Industries and M/s Kavish Impex Pvt. Ltd. versus the Union of India, addressed the legality of a retrospective circular issued by the Directorate General of Foreign Trade (DGFT) that curtailed export incentives under the Focus Product Scheme (FPS).

Background: The Focus Product Scheme and the Dispute

The Focus Product Scheme (FPS), part of the Foreign Trade Policy (FTP) 2009-2014, was designed to incentivize exports of products with high export intensity or employment potential. Exporters of notified products, as listed in Appendix 37D of the Handbook of Procedures, were entitled to Duty Credit Scrips equivalent to 2% of the Free on Board (FOB) value of their exports.

Malik Tanning Industries and Kavish Impex exported polyester printed and dyed fabrics, which were classified as “Technical Textiles – Woven Fabrics of Synthetic Filament Yarn” under ITC (HS) Code 5407. These products were eligible for FPS benefits at the time of export, and the exporters had already received and utilized the incentives.

The Controversial Circular

On 21 October 2011, DGFT issued Policy Circular No. 42, which retrospectively limited FPS benefits for “Technical Textiles” to only 33 items, effective from 1 April 2011. This excluded many products, including those exported by the petitioners, from the incentive scheme. The authorities subsequently demanded the return of Duty Credit Scrips or refund of the duty amounts with interest from the exporters.

Legal Issues Examined

The core legal questions addressed by the Court were:
1. Can DGFT issue a circular that retrospectively withdraws export incentives already granted under the Foreign Trade Policy?
2. Does DGFT have the authority to amend the list of eligible products for incentives with retrospective effect?
Court’s Analysis and Findings

1. Nature of DGFT’s Powers
- The Foreign Trade Policy is framed by the Central Government under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992.
- DGFT’s role is limited to implementing the policy and clarifying procedural or interpretational doubts, not making substantive policy changes.
- Section 6(3) of the Act specifically excludes the delegation of policy-making powers under Section 5 to DGFT.
2. Retrospective Policy Changes
- The Court held that neither the Central Government nor DGFT can make or amend policy with retrospective effect unless expressly empowered by the statute.
- The Supreme Court’s precedents were cited, emphasizing that vested or accrued rights cannot be taken away by retrospective policy changes unless clearly authorized by law.
3. Interpretation of “Technical Textiles”
- The Court found the classification of “Technical Textiles – Woven Fabrics of Synthetic Filament Yarn” under ITC (HS) Code 5407 to be clear and unambiguous.
- The impugned circular did not clarify an ambiguity but instead substantively restricted the scope of eligible products, which is beyond DGFT’s powers.
4. Vested Rights and Constitutional Protection
- The benefits already availed by the exporters constituted vested rights, protected under Article 300A of the Constitution (right to property).
- The attempt to recover incentives already granted was found to be unlawful.
Judgment and Impact

The Delhi High Court set aside the DGFT’s circular and the subsequent demand letters, ruling that:
- DGFT cannot retrospectively withdraw export incentives already granted under the Foreign Trade Policy.
- Any substantive change to the list of eligible products must be prospective and made by the Central Government, not DGFT.
- Exporters who had already received FPS benefits for eligible products at the time of export cannot be asked to return them due to later policy changes.
Conclusion

This judgment reinforces the principle that government authorities cannot retrospectively alter or withdraw benefits granted under statutory policies unless explicitly authorized by law. It provides much-needed certainty and protection for exporters relying on government incentive schemes, ensuring that vested rights are not arbitrarily taken away.

Connected Matter

Delhi High Court Quashes Retrospective Withdrawal of MEIS Benefits for FIBC Exporters

Source: Delhi High Court

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July 4, 2026
Delhi High Court Quashes Retrospective Withdrawal of MEIS Benefits for FIBC Exporters
Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation

Date: 03.07.2026

Delhi High Court Quashes Retrospective Withdrawal of MEIS Benefits for FIBC Exporters

This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .

The Delhi High Court recently delivered a landmark judgment in favor of the Indian Flexible Intermediate Bulk Container Association (FIBC Association), addressing the retrospective withdrawal of export incentives under the Merchandise Exports from India Scheme (MEIS) for FIBC bags. This decision has significant implications for exporters and the broader Indian export policy framework.

Background: The MEIS Scheme and FIBC Sector

Flexible Intermediate Bulk Containers (FIBC), commonly known as Jumbo Bags, are a major export product for India, contributing nearly USD 1 billion annually and employing thousands across the country. The MEIS scheme, introduced under the Foreign Trade Policy (FTP) 2015-2020, provided crucial incentives to exporters of FIBC bags, helping India capture a substantial share of the global market.

The Controversy: Retrospective Withdrawal of Benefits

On 29th January 2020, the Directorate General of Foreign Trade (DGFT) issued a notification retrospectively withdrawing MEIS benefits for FIBC bags, effective from 7th March 2019. Exporters argued that this sudden and retroactive change caused severe financial losses, as export contracts had been priced with the expectation of receiving MEIS incentives. The FIBC Association challenged the notification, contending that such retrospective withdrawal was arbitrary, unlawful, and unsupported by statutory authority.

Key Arguments

Petitioner’s Stand
1. Unlawful Retrospective Application: The FIBC Association argued that the Foreign Trade (Development and Regulation) Act, 1992, does not empower the government to make retrospective amendments to export policies.
2. Financial Harm: Exporters had factored MEIS benefits into their pricing, and the retrospective withdrawal led to significant losses.
3. Lack of Alternative Benefits: The replacement scheme, RoSCTL, offered no benefit (“Nil” rate) to FIBC exporters, leaving them without any support.
Government’s Defense
1. Policy Discretion: The government claimed the right to amend or withdraw export incentives in the public interest.
2. WTO Compliance: The withdrawal was partly in response to World Trade Organisation (WTO) obligations.
3. Transition to RoSCTL: The government argued that exporters were aware of the transition to the RoSCTL scheme, though FIBC bags received no benefit under it.
Court’s Analysis and Findings

The High Court examined the statutory framework and relevant Supreme Court precedents. It found:
- No Statutory Authority for Retrospective Withdrawal: Section 5 of the FTDR Act, 1992, does not permit retrospective amendments to export policies unless expressly provided by law.
- Principle of Natural Justice: Retrospective withdrawal of benefits, especially without prior notice, violates principles of fairness and equity.
- No Double Benefit: Since FIBC bags received no benefit under RoSCTL, the argument of preventing double benefits was unfounded.
- Arbitrariness and Discrimination: Selectively withdrawing benefits for FIBC bags, while other products continued to receive support, was arbitrary and discriminatory.
The Judgment: Relief for Exporters

The Court ruled in favor of the FIBC Association, issuing the following directions:
1. Prospective Application Only: The notification withdrawing MEIS benefits for FIBC bags will apply only prospectively, not retrospectively.
2. Processing of Claims: The government must process and grant MEIS benefits for FIBC bag exports made between 7th March 2019 and the date of the notification, provided applications were submitted as per the Court’s interim order.
Impact and Significance

This judgment restores crucial export incentives to the FIBC sector for the disputed period, providing much-needed relief to exporters. It also sets an important precedent, reinforcing that government policy changes affecting incentives must not be applied retrospectively without clear legislative backing.

The decision upholds the principles of fairness and legal certainty in India’s export policy regime.

Connected Matter

Delhi High Court Partially Allows Chillies Exporters Association’s Petition Against TMA Scheme Foreclosure

Source: Delhi High Court

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July 3, 2026