Payment recognized under decree requires unconditional compliance; bank guarantees do not suffice, and interest continues until funds are available to the decree holder.

JUDGEMENT

AMIT BANSAL, J.

1. The present enforcement petition has been filed seeking enforcement of the Arbitral Award dated 9^th November 2017 (hereinafter the “Arbitral Award”).

2. Brief factual background of the case is set out below:

2.1 On 18^th April 2012, notice was issued on behalf of the claimant/ decree holder invoking the arbitration clause. The statement of claim was filed on behalf of the decree holder (claimant in the arbitration) on 17^th October 2012.

2.2 On 12^th December 2012, the Division Bench of Bombay High Court passed an order in an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter ‘the Act’), arising out of a petition under Section 9 of the Act, directing the judgment debtor to furnish a security in the sum of Rs.187 crores to the decree holder. An SLP was filed against the said order, which was dismissed in July, 2013.

2.3 On 14^th August 2013, a bank guarantee was furnished on behalf of the judgment debtor to the decree holder for a sum of Rs.187 crores, which continued during the pendency of the arbitration proceedings.

2.4 The Arbitral Award was passed by the Arbitral Tribunal on 9^th November 2017.

2.5 On 12^th February 2018, a Single Judge of this Court dismissed the petition under Section 34 of the Act filed on behalf of the judgment debtor.

2.6 The said decision was carried in appeal before the Division Bench by the judgment debtor under Section 37 of the Act. On 5^th March 2018, the Division Bench directed the judgment debtor to deposit the entire amount as per the Arbitral Award, including interest calculated at 9% per annum, with the Registry of this Court. It was further directed that upon the deposit being made, the bank guarantee given by the judgment debtor to the decree holder would be returned.

2.7 On 23^rd March 2018, at the request of the counsel appearing on behalf of the judgment debtor, the Division Bench permitted the judgment debtor to deposit a sum of Rs.152.22 crores in court during the course of the day, which was done by the judgment debtor.

2.8 The Division Bench dismissed the appeal filed by the judgment debtor on 30^th August 2018.

2.9 On 14^th September 2018, the present execution petition was filed by the decree holder seeking enforcement of the Arbitral Award.

2.10 On 24^th September 2018, this Court directed the Registry to release Rs.60 crores to the decree holder with a caveat that decree holder will retain the said money in its Indian Bank Account till the SLP filed by the judgment debtor against the order of the Division Bench is listed.

2.11 On 11^th October 2018, the Supreme Court disposed of the Special Leave Petition by modifying the interest rate on the Euro component of the Award from 9% per annum to London Interbank Offered Rate (LIBOR) plus 3%.

2.12 On 8^th August 2019, the executing court directed the Registry to release a sum of Rs.34,69,20,245/- to the decree holder.

2.13 On 6^th January 2020, the executing court passed an order that the amount deposited by the judgment debtor in this Court has to be adjusted towards the interest first and thereafter towards the principal amount. The Court also held that the Euro component of the Award would be converted into Indian Rupees as per the exchange rate prevalent on the date of filing of the claim petition i.e. 17^th October 2012.

2.14 An appeal was filed by the decree holder against the judgment passed by the executing court on 6^th January 2020, which was dismissed by the Division Bench on