Coal India has been given time till December to confirm to the court whether the payment due under the award has been paid.
Coal India has been asked to pay up the arbitration award in a long-running case between the PSU major and Canadian Commercial Corp over a dispute relating to the construction of a coal extracting facility.
The coal behemoth had objected to the international arbitration award for payment of "substantial costs" arguing that it goes against Indian public policy.
The Calcutta High Court has now upheld the ruling and has castigated Coal India for fighting a case that has "done no credit" to it.
Putting at rest the case, Calcutta High Court has directed Coal India to pay "remittance in Canadian dollars of the principal amount awarded on costs in the arbitral award of March 1, 2002."
The PSU has been directed to pay either in Canadian currency or "Indian equivalent of the principal amount as it would stand upon Canadian $532129 being converted into Indian rupees as on date."
The Canadian company is also entitled to the costs of the present proceedings for enforcement of the foreign award assessed at Canadian $10000, the order said.
Coal India has been given time till December to confirm to the court whether the payment due under the award has been paid.
The judgement bears significance in the sense that a public sector company tried to prove that foreign arbitral award is contrary to the public policy of India.
Messages sent to Coal India Chairman Sutirtha Bhattacharya didn't elicit response.
"In assessing whether a foreign arbitral award is contrary to the public policy of India, the ground cannot be used as an excuse to review the order on merits. The ground is of very limited scope and the award must be crying out as being patently unfair for it to be regarded as contrary to the public policy of India," Judge Sanjib Banerjee said.
The parties entered into an agreement in 1989 for the foreign company to set up a coal-extracting facility for the Indian company in the Rajmahal area in Jharkhand.
A dispute arose between them and Coal India approached International Chamber of Commerce for arbitration.
The arbitral tribunal held its meetings in the United Kingdom and the foreign company was awarded substantial costs. The present proceedings were initiated in July 2013, about a year after the Indian company's challenge to the arbitral award failed before the arbitration bench in this court on March 20, 2012. A special leave petition against the appellate order was dismissed by the Supreme Court.
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