Supreme Court of India establishes principles for foreign currency conversion in International Arbitral Awards (DLF Ltd v Koncar Generators)

Article summary

Arbitration analysis: The Supreme Court of India has held that the date for determining the exchange rate for converting a foreign currency arbitral award to Indian rupees is the date of deposit if the award holder is permitted to withdraw the amount, even conditionally. This decision emphasizes the importance of the date of deposit over the date of actual withdrawal or conversion, which is crucial for practitioners dealing with foreign arbitral awards. The court clarified that even if conversion is delayed due to regulatory restrictions, the deposit date remains the key date for exchange rate determination. This ruling impacts how foreign currency awards are enforced in India, ensuring that award holders cannot benefit from exchange rate fluctuations due to procedural delays. For commercial practitioners it is crucial to devise an express contractual clause providing for currency in which an award should be satisfied to ensure that the award sum is available for use...