Supreme Court Declines Fresh Clarification in Foreign Currency Arbitration, Refers Payment Disputes to Executing Court and Urges Law Commission to Reform Arbitral Award Enforcement
Supreme Court Rules Completed Arbitration Appeal Cannot Be Reopened for Payment Clarifications, Dismisses Modification Plea and Seeks Law Commission Review of Systemic Award Execution Delays
Facts
Royal Construction Company, the award-holder, secured an international arbitral award dated 10 August 2002 against National Projects Construction Corporation, denominated in Iraqi dinars. The Supreme Court restored the award’s directions in 2015. During execution, a 2017 Delhi High Court order permitted rupee payment at an exchange rate tied to the 1982 agreement; the Division Bench set that order aside in 2019 and certified a question about conversion of the awarded sum from US dollars into rupees. On 10 October 2023, the Supreme Court held that fixing any conversion date was unnecessary and the foreign-currency award should not be disturbed. The award-debtor later asserted that principal amounts had already been paid in rupees in 2009.
Issues
Whether a concluded Supreme Court ruling on a certified legal question could be reopened through a request for clarification about earlier payments; which forum should decide adjustment or set-off of amounts allegedly deposited and withdrawn; and how delays in enforcing arbitral awards should be addressed.
Petitioner’s Arguments
Royal Construction, as award-holder and appellant, challenged the Delhi High Court’s interim order of 16 February 2026 granting liberty to seek clarification from the Supreme Court about earlier rupee payments. Its position was that the 2023 Supreme Court decision answered only the referred legal question and should not be reopened to determine factual accounting issues arising in ongoing execution. The company sought to protect the efficacy of the restored arbitral award and have execution questions resolved by the court already seized of enforcement.
Respondent’s Arguments
National Projects Construction Corporation, the award-debtor, maintained that the principal sum had already been paid in Indian rupees in 2009 under High Court orders. Through Miscellaneous Application Diary No. 48152 of 2026 in Civil Appeal No. 1991 of 2019, it sought modification of the Supreme Court’s 10 October 2023 judgment on the footing that those deposited sums had been withdrawn by the award-holder. Its asserted entitlement to adjustment or set-off remained a question of factual accounting.
Analysis of the Law
Articles 133(1)(a) and 134A of the Constitution enabled the High Court to certify a substantial question of law for Supreme Court consideration, but that appellate jurisdiction was confined to the question certified. After it was answered, the prior lis was exhausted; a clarification application could not convert the Supreme Court into a supervisory executing forum. Under Section 36 of the Arbitration and Conciliation Act, 1996, an award is enforceable like a court decree, making the competent executing court responsible for payment, withdrawal and set-off disputes. The judgment underscores minimal judicial interference and the need for effective, timely post-award enforcement.
Precedent Analysis
The Court traced its own judgment dated 24 February 2015, which restored the 2002 award and reaffirmed restraint under Sections 34 and 37 of the Arbitration Act, and the judgment dated 10 October 2023 in Civil Appeal No. 1991 of 2019. The latter disposed of the certified currency-conversion question without examining historical payments. Those earlier decisions bound the present proceedings but did not adjudicate whether 2009 deposits had discharged or reduced the award-debtor’s liability. No earlier adjudication could therefore be enlarged retrospectively by a modification request.
Court’s Reasoning
The Supreme Court found the Delhi High Court had misunderstood the limited subject of the 2023 ruling. Since the Court was asked only whether a dollar-to-rupee conversion date should be fixed, it had no obligation to enquire into earlier rupee deposits or withdrawals. The parties may raise those matters before the executing court and, where appropriate, its appellate forum. Concerned that enforcement remained disputed more than 24 years after the award, the Bench asked the Law Commission to study delays, asset disclosure, repetitive objections and whether domestic and foreign awards warrant distinct enforcement mechanisms.
Conclusion
The civil appeal was disposed of with clarification that the 2023 appellate proceedings could not be reopened for fresh factual determinations. The award-debtor’s miscellaneous modification application was dismissed, while its rights to raise payment adjustment and set-off objections before the executing court were preserved. The Registry was directed to send the judgment to the Chairman of the Law Commission of India for a focused study of legislative and procedural improvements to arbitral-award enforcement. No final accounting of the 2009 payments was undertaken by the Supreme Court.
Case: M/s Royal Construction Company Pvt. Ltd. v. M/s National Projects Construction Corporation
Court: Supreme Court of India
Case Number: 2026 INSC 1167; Civil Appeal arising from SLP(C) No. 14005/2026; M.A. Diary No. 48152/2026 in Civil Appeal No. 1991/2019
Judge: Justice Vikram Nath (author), Justice Sandeep Mehta and Justice Aparesh Kumar Singh
Date: 28 October 2026
Result: Civil appeal disposed of; modification application dismissed; set-off disputes left to executing court; Law Commission review requested.
