Steel Authority of India vs. Norvic Shipping North America Inc
Background
SAIL had contracted with the Canada-incorporated shipping company Norvic to transport 1.6 million metric tons of limestone from the UAE to India over multiple voyages. Disputes arose over how long each ship was allowed to sit before being charged "demurrage" (a penalty for delay) at various Indian ports, especially given delays from a cyclone and, later, the Covid-19 pandemic and lockdown. An arbitral tribunal awarded Norvic freight, demurrage, and interest across seven vessels, and SAIL challenged that award in court.
Decision Breakdown
The Court dismissed SAIL's challenge across all seven vessels. It held this was an "international commercial arbitration" (since Norvic is a foreign company) seated in Delhi, meaning the more limited grounds for challenging domestic awards (like "patent illegality") don't apply: the award can only be set aside for narrower reasons, such as being genuinely bereft of reasoning or contrary to fundamental policy. On the facts, the Court found the tribunal had properly considered whether notices of a ship's arrival readiness were valid, whether equipment breakdowns should pause the delay-clock, and crucially, whether Covid-19 restrictions actually prevented cargo unloading, noting that government orders at the time expressly classified port cargo operations as "essential services" that were required to continue, undercutting SAIL's claim that the pandemic excused its delays. It also upheld the interest rate awarded (LIBOR + 3%, capped at 12% per annum) as clear and not open-ended.
Lesson Learnt
In cross-border commercial disputes, once an arbitration is classified as "international commercial arbitration," Indian courts apply a much narrower standard when reviewing the award: they will not re-examine the tribunal's factual findings or substitute their own view, even on matters like whether Covid-19 lockdown orders genuinely prevented contract performance, so long as the tribunal's reasoning is intelligible and grounded in the evidence before it.