18th January, 2022

Arbitral Award Perverse on the Basis of Patent Illegality - PSA Sical Case

Indian courts have often been known for their undue scrutiny of arbitral awards, due to which a number of amendments were introduced in the Arbitration and Conciliation Act, 1996 (“Arbitration Act”). In 2015, the Act was amended to limit judicial interference in arbitral awards and it was followed in landmark judgements such as Ssangyong Engineering and Construction Co. Ltd. v. National Highways Authority of India [(2019) 15 SCC 131] and MMTC Limited v. Vedanta Limited [(2019) 4 SCC 163]. However, there were a number of decisions where the judiciary departed from this trend. One such issue arose before the Hon’ble Supreme Court in the matter of PSA Sical Terminals Pvt Ltd v Board of Trustees of VO Chidambranar Port Trust Tuticorin & Ors [2021 SCC OnLine SC 508], where the principles laid down in Ssangyong and MMTC were followed but their method of application was slightly tweaked.

  • Arbitration
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