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M/S. Centrotrade Minerals and Metals Inc. v. Hindustan Copper Ltd.

Civil Appeal · 2020 INSC 411Decided 2 Jun 2020
Civil Appeal No. 2562 of 2006
Justice Rohinton Fali Nariman · Justice S. Ravindra Bhat · Justice V. Ramasubramanian

Background

Centrotrade, a U.S. company, sold copper concentrate to Hindustan Copper Ltd. (HCL) under a contract with a two-step arbitration clause: first an arbitration in India, and if either side was unhappy with that result, a second arbitration in London. The Indian arbitration produced a "Nil Award," so Centrotrade pursued the London arbitration, which awarded it a substantial sum. HCL resisted enforcement of the London award in Indian courts for nearly two decades, and the dispute had already reached the Supreme Court once before, resulting in a split decision between two judges that needed to be resolved by a larger Bench.

Decision Breakdown

The Supreme Court held that the two-tier arbitration clause was valid, and closely examined HCL's claim that it never got a fair chance to present its case in the London arbitration. Reviewing the actual correspondence, the Court found that the London arbitrator had in fact given HCL multiple extensions of time, and HCL's own prolonged refusal to participate, followed by late submissions, including after the 9/11 attacks in New York, which the arbitrator still considered, did not amount to any unfairness. The Court held that one of the two earlier Supreme Court judges hearing this dispute had made factual errors in criticizing the arbitrator. Centrotrade's appeal was allowed, HCL's appeal was dismissed, and the Court directed that the foreign (London) arbitration award must now be enforced in India.

Lesson Learnt

An arbitrator who gives a party repeated, generous opportunities to present its case is not at fault if that party chooses not to use them in time; and Indian courts enforcing a foreign arbitration award will not reopen or second-guess the arbitrator's fair handling of procedure.

Official source (sci.gov.in)View Judgment (PDF)

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