G.S. Patel, J.

I. Overview

1. Deutsche Bank AG, the petitioner (“Deutsche Bank”), claims that an amount of US$ 21,001,543.71 (plus interest) is due to it as of 1st May 2010 from the respondent, Finolex Industries Ltd (“Finolex”) under a derivative transaction. This transaction is said to accord with a 2002 ISDA Master Agreement, one that is incorporated by reference.

2. Finolexinter alia manufactures PVC resin. For this, it needs various chemicals that it must import as these are not locally available. The value of its annual imports range between US$ 100–200 million. Finolex pays for its imports in US dollars. Resultantly, its rupee import cost depends on the dollar-rupee (USD/INR) exchange rate at any given time. Finolex’s purchases are also on credit, often for up to as much as year from the supply date. The raw material price is pegged (in US dollars) at the time the order is placed. Since Finolex makes actual payment at a later date, the rupee amount it uses in payment depends on the USD/INR exchange rates. At the same time, Finolex’s domestic sale prices do not fluctuate in tandem with currency exchange rate differentials. This requires Finolex to hedge or otherwise p