The Delhi High Court, in a significant commercial ruling, has dismissed Steel Authority of India Limited’s (SAIL) plea challenging an arbitral award in favour of British Marine PLC. The court, presided over by Justice Jyoti Singh, upheld the tribunal’s 2018 award which had found SAIL liable for wrongful termination of a five-year shipping contract and directed it to compensate British Marine with damages and interest.
Background
The dispute stemmed from a Contract of Affreightment (COA) signed in December 2007 between SAIL and the UK-based British Marine for the transport of 3 million metric tonnes of coking coal from Australia to Indian ports.
The agreement required SAIL to declare shipping schedules (“stems”) periodically. However, British Marine alleged that SAIL stopped nominating vessels after May 2011 and unilaterally terminated the contract in September 2012, citing “non-extension of the agreement”.
The arbitral tribunal, constituted in New Delhi, ruled in 2018 that SAIL’s termination was unjustified and contrary to Clause 62 of the COA. It awarded damages to British Marine based on the difference between contracted and prevailing market freight rates - a standard measure in long-term maritime disputes.
Court's Observations
Justice Singh’s 107-page judgment, dated 13 October 2025, methodically addressed each contention raised by SAIL under Section 34 of the Arbitration and Conciliation Act, 1996.
The Court held that the arbitral tribunal’s reasoning was plausible and well-founded, emphasizing that interpretation of contractual clauses was squarely within the tribunal’s domain.
“The tribunal has not rewritten the contract. It has merely held that the reason for termination was outside Clause 62’s stipulations,” the Court noted.
On SAIL’s argument that it was entitled to terminate the contract without liability, the Court disagreed, observing that refusal to extend the contract was not a valid ground for termination under the agreed clause.
Justice Singh highlighted that the tribunal correctly found SAIL to be actively shipping coal from Australia in the spot market during the same period it cited as a reason for non-performance.
Regarding SAIL’s challenge to the calculation of damages, the Court upheld the method used - comparing agreed freight rates with average market rates - as “consistent with the legal principles governing loss quantification under Section 73 of the Indian Contract Act, 1872”.
“The party claiming breach must prove actual loss, and the tribunal has done so based on cogent evidence,” the bench remarked.
The Court also brushed aside SAIL’s objections to the interest component, clarifying that the award carried 6% pre-award interest and 9% post-award interest only in case of delayed payment “not dual interest for the same period.”
Decision
Concluding the matter, the Delhi High Court upheld the arbitral award dated 13 September 2018 in its entirety. Justice Singh dismissed SAIL’s petition, stating that no ground of patent illegality, perversity, or violation of Indian public policy was made out.
“For all the aforesaid reasons, this petition is dismissed, and the impugned arbitral award is upheld,” the Court ordered.
The Court also scheduled related enforcement proceedings - filed by British Marine to execute the award - for 20 November 2025, signaling that the decree holder may now move swiftly to recover the awarded sum, reportedly exceeding ₹480 crore with interest.
Case Details: Steel Authority of India Limited v. British Marine PLC
