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Steel Authority of India Limited vs. British Marine PLC

First Appeal from Order (Original Side, Commercial) · 2026:DHC:7953-DBDecided 17 Sept 2026New Delhi Bench
FAO(OS) (COMM) 17/2026CNR: DLHC011094262025
Justice Prathiba M. Singh · Justice Vikas Mahajan

Background

Steel Authority of India (SAIL) had entered a long-term shipping contract in 2007 with UK-based British Marine PLC to transport coking coal from Australia, but stopped placing shipping orders in 2010 citing global economic conditions, eventually terminating the contract in 2012. An arbitral tribunal ruled against SAIL in 2018, awarding damages to British Marine, and a Single Judge of the Delhi High Court upheld that award in 2025. SAIL appealed, arguing the two arbitrators were disqualified because they had earlier decided a similar dispute involving SAIL and another shipping company, and that the contract's default clause was misinterpreted.

Decision Breakdown

The Division Bench held that this was an "international commercial arbitration," where an award can only be challenged on narrow public-policy grounds, not on the broader "patent illegality" ground available for purely domestic cases. On arbitrator bias, the Court found SAIL had known about the arbitrators' earlier decision for years but raised its objection far too late (well beyond the 15-day window the law and arbitration rules allow), and that simply having decided a similar legal issue before does not disqualify a specialised arbitrator, especially in a niche field like maritime arbitration with a small expert pool. On the contract itself, the Court agreed that SAIL's own reading of the termination clause would have let it end the contract for its own breach and unfairly benefit from its own wrongdoing, so the tribunal's interpretation and damages calculation were upheld. The appeal was dismissed in full.

Lesson Learnt

If you suspect an arbitrator has a conflict of interest, you must object promptly (within about two weeks of learning the relevant facts), waiting years and raising it only after an unfavourable award will very likely be treated as a waiver of the right to complain.

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