Mmtc Ltd. vs Pamp Holding Mauritius Ltd. & Anr.
- Court
- Delhi High Court
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment reserved on: 07.09.2026
Judgment pronounced on: 03.11.2026
# CNR No. DLHC011066432017
+ O.M.P. (COMM) 188/2017 & I.A. 4464/2017
MMTC LTD. .....Petitioner
Through: Mr. Ravi Gupta, Mr. Tarang
Narang, Ms. Muskan Mehra,
Ms. S. Gupta, Advs.
versus
PAMP HOLDING MAURITIUS LTD. & ANR.
.....Respondents
Through: Mr. Zorawar Singh, Mr. Jayant
Rastogi, Mr. Shubham, Advs.
for R1.
Mr. Jayant Mehta, Sr. Adv.
with Mr. Abhishek Mishra, Ms.
Mansvini Jain, Advs. for R-2.
CORAM:
HON'BLE MR. JUSTICE OM PRAKASH SHUKLA
JUDGMENT
% 03.11.2026
A. Introduction
1. The present petition under Section 34 of the Arbitration and
1
Conciliation Act, 1996 , has been filed challenging the arbitral award
rendered in disputes arising out of the Share Purchase and
2
Shareholders Agreement dated 22.10.2008 executed between MMTC
1
“the Act” hereinafter
2
“SPSHA” hereinafter
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 1 of 43
3 4 5
Limited ,PAMP SA and MMTC-PAMP India Private Limited for
establishing and operating a gold and silver refinery in India.
2. The dispute also concerns the execution of a Dore Sourcing
6
Agreement dated 02.02.2012 between MPIPL and MKS Switzerland
SA (PAMP’s associated company), and a Process Know-How Licence
Agreement dated 9/11.07.2012 between MPIPL and PAMP, pursuant
to which MPIPL paid approximately Rs. 71.25 crore towards sourcing
charges and licence fees.
B. Overview of the dispute
3. MMTC is a Government of India undertaking engaged in the
trading of metals and other commodities, whereas PAMP is a
Switzerland based company engaged in the refining and processing of
precious metals, including gold and silver.
4. MMTC and PAMP entered into a SPSHA dated 22.10.2008 for
establishing and operating a joint venture company, i.e. MPIPL, for
refining and manufacturing gold and silver products in India.
5. Initially, MMTC held 26% shareholding in MPIPL, while
PAMP held 72%, with the remaining 2% held by the MMTC
Employees’ Mutual Benefit Trust. Subsequently, PAMP’s
shareholding was transferred through its group companies to PAMP
3
“MMTC” hereinafter
4
“PAMP” hereinafter
5
“MPIPL” hereinafter
6
“DSA” hereinafter
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 2 of 43
7
Holdings Mauritius Limited , which became the majority shareholder
of MPIPL.
6. The present dispute arises out of the obligations of the parties
under the SPSHA, particularly concerning the sourcing of raw
materials and the clause of technical know-how to MPIPL.
C. Brief Facts
7. MPIPL, a joint venture was established to set up and operate a
gold and silver refinery in India. Its primary business was to procure
raw materials, including partially refined gold, thereafter process and
refine that gold into high purity gold and silver. Additionally, its
business was also to manufacture and sell finished products such as
gold bars, coins and medallions.
8. Under the SPSHA, MMTC was required to assist MPIPL with
matters related to government permissions, including regulatory
approvals, acquisition etc. PAMP was required to provide technical
expertise, refining knowledge, technical know-how and assistance in
sourcing raw materials.
9. Thus, MPIPL was the company responsible for operating the
refinery and conducting the business, with MMTC and PAMP
contributing their respective expertise and assistance as delineated in
the SPSHA.
7
“PHML” hereinafter
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 3 of 43
10. The prelude to the dispute began when MPIPL, which was
established to operate a gold and silver refinery, entered into two
separate agreements in 2012 with companies associated with the
PAMP group itself.
11. First, on 02.02.2012, MPIPL entered into a DSA with MKS
Switzerland SA (PAMP’s associated company), for arranging the
supply of partially refined raw material/gold required for its refinery.
Under this agreement, as per MMTC, MPIPL was required to pay
substantial sourcing charges to MKS Switzerland SA for procurement
of raw material.
12. Second, in July 2012, MPIPL entered into a Process Know-
How Licence Agreement with PAMP itself, for using its specialised
gold and silver refining technology. Under this agreement also, as per
MMTC, MPIPL was required to pay substantial licence fees directly
to PAMP.
13. By 31.03.2015, MPIPL had paid approximately Rs.51.44 crore
to MKS Switzerland towards sourcing charges and Rs.19.80 crore to
PAMP itself towards licence fees, totalling Rs.71.25 crore.
14. MMTC objected to the payments being made to PAMP’s
associated company and PAMP itself. MMTC alleged that PAMP was
misusing its majority shareholding and control over MPIPL to divert
substantial funds from the joint venture to its own associated
companies and alleged breach of the terms of SPSHA.
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 4 of 43
15. According to MMTC, it had agreed to the majority
shareholding of PAMP on the understanding that PAMP would
provide these capabilities required to the joint venture without
charging any extra fee. However, as per MMTC, instead of fulfilling
these obligations as originally understood, PAMP allegedly used its
majority control to arrange separate agreements through which its own
group companies and PAMP itself received substantial payments for
providing the same services they were expected to contribute, thereby
profiteering itself singularly at the cost of JV MPIPL.
16. MMTC therefore alleged that PAMP was unjustly enriching
itself by effectively obtaining a double financial benefit as by holding
the majority ownership in the joint venture on the strength of its
promised expertise, and second, by extracting additional payments
from the joint venture for that same expertise.
17. In a nutshell, the case of MMTC is the alleged improper
diversion of MPIPL’s funds to the PAMP group, which in result
substantially reduced the financial benefits available to MMTC as a
26% shareholder. According to MMTC, this alleged diversion of fund
constituted a breach of the obligations under the SPSHA, particularly
the requirement of good faith under Article 34.
D. Impugned Award
18. On 29.08.2014, MMTC formally raised its concerns and sought
a review of these transactions by MPIPL’s Board and Audit
Committee. However, MPIPL rejected the allegations, and despite
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 5 of 43
subsequent discussions between the parties, the dispute could not be
resolved amicably.
19. Consequently, on 13.04.2015, MMTC invoked the arbitration
clause contained in Article 26 of the SPSHA and initiated arbitration
against PHML and MPIPL. In the arbitration, MMTC initially sought
cancellation or modification of the two agreements and a direction for
the return of approximately Rs. 71.25 crore paid by MPIPL to PAMP
and MKS Switzerland, contending that these payments violated the
obligations under the SPSHA.
20. The learned Arbitral Tribunal, by the impugned award,
dismissed all the claims raised by MMTC, holding that SSPHA did
not require PAMP to provide sourcing assistance and technical know-
how without any charges.
21. The Tribunal observed that Articles 2.3 to 2.5 required PAMP
to assist MPIPL but did not prohibit it from charging for such
services.
22. It further held that Article 34 permitted transactions between
MPIPL and companies associated with its shareholders on mutually
agreed or arm’s-length terms and found that the DSA and Licence
Agreement were entered into on such terms.
23. Regarding MMTC’s request to cancel or modify these
agreements, the Tribunal observed that MMTC had given up those
reliefs during arguments and, in any event, such orders could not be
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 6 of 43
passed in the absence of MKS Switzerland and PAMP, which were
not parties to the arbitration.
24. The Tribunal also rejected MMTC’s claim for refund of
approximately Rs.71.25 crore, holding that MPIPL gave those
payments and MPIPL itself had not sought their recovery, and MMTC
could not claim restitution on MPIPL’s behalf without an appropriate
derivative action.
25. The Tribunal further observed that MMTC should have claimed
damages for the alleged breach of the SPSHA instead of seeking
restitution, but had not done so. Accordingly, the Tribunal dismissed
MMTC’s claims and directed it to pay approximately Rs.1.77 crore in
costs to PHML and Rs.1.24 crore to MPIPL, besides the Tribunal's
fees and expenses.
E. Submissions before this Court
26. Mr. Ravi Gupta, learned Counsel for the Petitioner submit that
the very purpose of giving PAMP a majority shareholding of 72% in
MPIPL was to obtain its technical expertise, refining technology and
assistance in sourcing raw materials without any additional payment.
27. According to learned Counsel for the Petitioner, this
understanding was reflected in the MOU dated 03.01.2008, and the
SPSHA dated 22.10.2008 and the original project report, which did
not contemplate separate sourcing charges or licence fees. However,
PAMP allegedly misused its majority control to cause MPIPL to enter
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 7 of 43
into separate agreements with its own group companies, resulting in
payments of approximately Rs. 71.25 crore for services that PAMP
was already obligated to provide under Articles 2.4 and 2.5 of the
SPSHA.
28. Learned Counsel further submits that the DSA was executed
without its prior knowledge or approval, while the Licence Agreement
was entered into despite its objections. It is alleged that these
arrangements improperly diverted funds from the joint venture to the
PAMP group, which is in violation to the obligation of “Good faith”
under Article 34 of the SPSHA.
29. It is contended that the Tribunal wrongly interpreted the
agreement as permitting these additional charges and failed to
properly examine the alleged abuse of majority control and breach of
good faith. It is further submitted that although it had withdrawn its
prayers for cancellation and modification of the agreements, its
independent claim for restitution against PHML remained
maintainable and ought not to have been rejected.
30. The Learned Counsel impugns the Tribunal’s finding regarding
the arm’s-length nature of the transaction, contending that the
conclusion is ex-facie perverse and suffers from patent illegality. It is
further submitted that the impugned findings run contrary to the
fundamental policy of Indian law and are so perverse as to shock the
judicial conscience.
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 8 of 43
31. Per contra , Mr. Jayant Mehta, learned Senior Counsel for
Respondent No. 1, submitted that the learned Arbitral Tribunal rightly
dismissed MMTC’s claims, as the SPSHA never required PAMP to
provide its assistance and obligations free of charge.
32. Mr. Mehta contended that PAMP acquired its 72% shareholding
by investing money in the joint venture, and not in exchange for any
promise to provide free services, whereas MMTC’s decision to hold
only 26% was based on government policy.
33. According to Mr. Mehta, Articles 2.3 to 2.5 merely required
PAMP to assist MPIPL, while Article 34 permitted separate
commercial agreements with associated companies on mutually
agreed or arm’s-length terms. He further submitted that MKS
Switzerland did not merely help MPIPL find gold suppliers but also
arranged financing, provided guarantees and undertook commercial
risks, while PAMP permitted MPIPL to use its specialised refining
technology under a separate licence.
34. Mr. Mehta submits both agreements were commercially
beneficial to MPIPL and that MMTC failed to prove that the charges
were excessive or unfair. He further contended that PHML cannot be
directed to refund approximately Rs. 71.25 crore because it did not
receive those payments and was never a party to the two agreements,
and that MMTC could not seek restitution on behalf of MPIPL, which
had itself made no claim for recovery.
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 9 of 43
35. Mr. Mehta submitted that, MMTC should have claimed
damages for breach of SPSHA if it believed that PHML had violated
its contractual obligations, but it failed to do so.
36. Lastly, it was submitted that the Tribunal’s interpretation of the
SPSHA and its findings regarding the commercial fairness of the
transactions are supported by evidence and cannot be reconsidered by
the Court under the limited scope of Section 34, particularly since the
arbitration is an international commercial arbitration.
F. Reasoning
37. I have heard both the parties at length and perused the record in
its entirety.
38. Under Section 2(1)(f)(ii) of the Act, an arbitration qualifies as
an international commercial arbitration when at least one party is a
body incorporated outside India.
39. In the present case, MMTC is an Indian company. However,
PHML is incorporated in Mauritius. The presence of PHML as a party
to the arbitration in the present case is sufficient in itself to satisfy that
the present matter qualifies as an international commercial arbitration.
40. Thus, before diving deep into the merits of the case, it is
significant to first identify the extent to which this Court can interfere
with an award rendered in an international commercial arbitration.
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 10 of 43
41. The scope of interference under Section 34 is, in itself,
extremely limited. Furthermore, it is settled law that patent illegality is
not an available ground for challenging an award arising out of an
international commercial arbitration. This position is settled by the
Hon’ble Supreme Court in Ssangyong (supra) and Patel
8
Engineering Ltd. v. North Eastern Electric Power Corporation Ltd .
42. With patent illegality not being available as a ground for
interference, the question which warrants an answer is then what
grounds are actually available to this Court under Section 34.
43. To examine this closely, let us look at Section 34 of the Act.
44. An arbitral award can be set aside under Section 34(2) of the
Act, on seven statutory grounds. With patent illegality under Section
34(2A) in an ICAbeing not one of them, the other grounds fall into
two categories i.e. five under Section 34(2)(a) and two under Section
34(2)(b).In this regard, it would be beneficial to go through Section
34, the same reads as follows:
“34. Application for setting aside arbitral award .—(1) Recourse to
a Court against an arbitral award may be made only by an
application for setting aside such award in accordance with sub-
section (2) and sub-section (3).
(2) An arbitral award may be set aside by the Court only if—
(a) the party making the application 1[establishes on the basis of
the record of the arbitral tribunal that]—
8
(2020) 7 SCC 16Af7.
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 11 of 43
(ii) the arbitration agreement is not valid under the law to which
the parties have subjected it or, failing any indication thereon,
under the law for the time being in force; or
(iii) the party making the application was not given proper notice
of the appointment of an arbitrator or of the arbitral proceedings
or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or
not falling within the terms of the submission to arbitration, or it
contains decisions on matters beyond the scope of the submission
to arbitration:
Provided that, if the decisions on matters submitted to arbitration
can be separated from those not so submitted, only that part of the
arbitral award which contains decisions on matters not submitted
to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral
procedure was not in accordance with the agreement of the
parties, unless such agreement was in conflict with a provision of
this Part from which the parties cannot derogate, or, failing such
agreement, was not in accordance with this Part; or
(b) the Court finds that—
(i) the subject-matter of the dispute is not capable of settlement by
arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
2[Explanation 1.—For the avoidance of any doubt, it is clarified
that an award is in conflict with the public policy of India, only
if,—
(i) the making of the award was induced or affected by fraud or
corruption or was in violation of section 75 or section 81; or
(ii) it is in contravention with the fundamental policy of Indian
law; or
(iii) it is in conflict with the most basic notions of morality or
justice.
Explanation 2.—For the avoidance of doubt, the test as to whether
there is a contravention with the fundamental policy of Indian law
shall not entail a review on the merits of the dispute.]
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 12 of 43
3[(2A) An arbitral award arising out of arbitrations other than
international commercial arbitrations, may also be set aside by the
Court, if the Court finds that the award is vitiated by patent
illegality appearing on the face of the award:
(i) a party was under some incapacity, or
Provided that an award shall not be set aside merely on the ground
of an erroneous application of the law or by reappreciation of
evidence.]
(3) An application for setting aside may not be made after three
months have elapsed from the date on which the party making that
application had received the arbitral award or, if a request had
been made under section 33, from the date on which that request
had been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was
prevented by sufficient cause from making the application within
the said period of three months it may entertain the application
within a further period of thirty days, but not thereafter.
(4) On receipt of an application under sub-section (1), the Court
may, where it is appropriate and it is so requested by a party,
adjourn the proceedings for a period of time determined by it in
order to give the arbitral tribunal an opportunity to resume the
arbitral proceedings or to take such other action as in the opinion
of arbitral tribunal will eliminate the grounds for setting aside the
arbitral award.
(5) An application under this section shall be filed by a party only
after issuing a prior notice to the other party and such application
shall be accompanied by an affidavit by the applicant endorsing
compliance with the said requirement.
(6) An application under this section shall be disposed of
expeditiously, and in any event, within a period of one year from
the date on which the notice referred to in sub-section (5) is served
upon the other party.”
45. It is made out that Section 34(2)(a) contains five grounds,
numbered (i) to (v) and Section 34(2)(b) contains two grounds,
numbered (i) and (ii). Section 34(2A) contains only one additional
ground i.e. patent illegality. This ground is available only for
arbitrations other than international commercial arbitrations.
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 13 of 43
46. Therefore, in an international commercial arbitration, seven
statutory grounds are available under Section 34(2), and none under
Section 34(2A).
47. Under Section 34(2)(b)(i) of the Act, an arbitral award may be
set aside if the Court finds that the subject matter of the dispute is not
capable of settlement by arbitration under the law for the time being in
force.
48. Further, under Section 34(2)(b)(ii), an arbitral award may be set
aside if it is in conflict with the public policy of India.
49. Explanation 1 to the said provision restricts the scope of public
policy to three circumstances, i.e. (i) where the making of the award
was induced or affected by fraud or corruption, or was in violation of
Sections 75 or 81 of the Act; (ii) where the award is in contravention
of the fundamental policy of Indian law or (iii) where the award is in
conflict with the most basic notions of morality or justice.
50. Explanation 2 expressly clarifies that while examining whether
an award contravenes the fundamental policy of Indian law, the Court
cannot undertake a review of the merits of the dispute. Thus, the Court
cannot reappreciate the evidence or interfere with the findings of the
Arbitral Tribunal merely because a different interpretation or
conclusion is possible.
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 14 of 43
51. Having read the Section 34 (2) (b) (ii), an important question
arises in the mind of this Court as to what actually constitutes the
“ public policy of India ”, and how can a Section 34 Court determine
when it has been violated.
52. To reappreciate and understand this concept and the
circumstances in which a section 34 court can interfere, let us
understand the relevant precedent laid down by the Hon’ble Supreme
Court.
53. The Hon’ble Supreme Court in OPG Power Generation Pvt.
9
Ltd. v. Enexio Power Cooling Solutions India Pvt. Ltd , has
observed the following on Section 34 (2) (b) (ii), the same reads as
follows:
“48. Before undertaking the aforesaid exercise, it would be
apposite to consider as to how the expressions (a) “in
contravention with the fundamental policy of Indian law”; (b) “in
conflict with the most basic notions of morality or justice”; and (c)
“patent illegality” have been construed.
In contravention with the fundamental policy of Indian law
49. As discussed above, till the Amendment, 2015 the
expression “in contravention with the fundamental policy of Indian
law” was not found in the 1996 Act. Yet, in Renusagar (supra), in
the context of enforcement of a foreign award, while construing the
phrase “contrary to the public policy”, this Court held that for a
foreign award to be contrary to public policy mere contravention
of law would not be enough rather it should be contrary to: (a) the
fundamental policy of Indian law; and /or (b) the interest of India;
and/ or (c) justice or morality.
50. In the judicial pronouncements that followed Renusagar
(supra), already discussed above, the domain of what could be
9
(2025) 2 SCC 417
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 15 of 43
considered contrary to the ‘public policy of India’/ ‘fundamental
policy of Indian law’ expanded, resulting in much greater
interference with arbitral awards than what the lawmakers
intended. This led to the Amendment, 2015 in the 1996 Act.
51. In Ssangyong Engineering (supra), this Court dealt with the
effect of the Amendment, 2015. While doing so, it took note of a
supplementary report of February 2015 of the Law Commission of
India made in the context of the proposed 2015 amendments. The
said supplementary report has been extracted in paragraph 30 of
that judgment. The key features of it are summarized below:
(a) Mere violation of law of India would not be a violation
of public policy in cases of international commercial
arbitrations held in India.
(b) The proposed 2015 amendments in 1996 Act (i.e., in
Sections 34(2)(b)(ii) and 48(2)(b) including insertion of
sub-section (2-A) in Section 34) were on the assumption
that the terms, such as, “fundamental policy of Indian law”
or conflict with “most basic notions of morality or justice”
would not be widely construed.
(c) The power to review an award on merits is contrary to
the object of the Act and international practice.
(d) The judgment in Western Geco (supra) would expand
the court’s power, contrary to international practice.
Hence, a clarification needs to be incorporated to ensure
that the term ‘fundamental policy of Indian law’ is
narrowly construed. The applicability of Wednesbury
principles to public policy will open the floodgates. Hence,
Explanation 2 to Section 34(2)(b)(ii) has been proposed.
After taking note of the supplementary report, the statement of
objects and reasons of the Amendment Act, 2015, and the amended
provisions of Sections 28, 34 and 48, this Court held:
“34. What is clear, therefore, is that the expression public
policy of India, whether contained in section 34 or in
section 48, would now mean the fundamental policy of
Indian law as explained in paras 18 and 27 of Associate
Builders i.e. the fundamental policy of Indian law would be
relegated to Renusagar's understanding of this expression.
This would necessarily mean that Western Geco expansion
has been done away with. In short, Western Geco, as
explained in Paras 28 and 29 of Associate Builders, would
no longer obtain, as under the guise of interfering with an
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 16 of 43
award on the ground that the arbitrator has not adopted a
judicial approach the court’s intervention would be on the
merits of the award, which cannot be permitted post
amendment. However, in so far as principles of natural
justice are concerned, as contained in sections 18 and
34(2)(a) (iii) of the 1996 Act, these continue to be the
grounds of challenge of an award, as is contained in para
30 of Associate Builders.
35. *
36
37. In so far as domestic awards made in India are
concerned, an additional ground is now available under
sub-section (2-A), added by the Amendment Act, 2015 to
section 34. Here, there must be patent illegality appearing
on the face of the award, which refers to such illegality as
goes to the root of the matter, but which does not amount to
mere erroneous application of the law. In short, what is not
subsumed within the fundamental policy of Indian law,
namely, the contravention of a statute not linked to public
policy or public interest, cannot be brought in by the back
door when it comes to setting aside an award on the ground
of patent illegality.
38. Secondly, it is also made clear that reappreciation of
evidence, which is what an appellate court is permitted to
do, cannot be permitted under the ground of patent
illegality appearing on the face of the award.
39. To elucidate, para 42.1 of Associate Builders, namely, a
mere contravention of the substantive law of India, by itself,
is no longer a ground available to set aside an arbitral
award. Para 42.2 of Associate Builders, however, would
remain, for if an arbitrator gives no reasons for an award
and contravenes section 31(3) of the 1996 Act, that would
certainly amount to a patent illegality on the face of the
award.
40. The change made in Section 28(3) by the Amendment
Act really follows what is stated in paras 42.3 to 45 in
Associate Builders, namely, that the construction of the
terms of a contract is primarily for an arbitrator to decide,
unless the arbitrator construes the contract in a manner
that no fair minded or reasonable person would; in short,
that the arbitrator’s view is not even a possible view to
take. Also, if the arbitrator wanders outside the contract
and deals with the matters not allotted to him, he commits
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 17 of 43
an error of jurisdiction. This ground of challenge will now
fall within the new ground added under Section 34 (2-A).
41. What is important to note is that a decision which is
perverse, as understood in paras 31 and 32 of Associate
Builders, while no longer being a ground for challenge
under “public policy of India”, would certainly amount to a
patent illegality appearing on the face of the award. Thus, a
finding based on no evidence at all or an award which
ignores vital evidence in arriving at its decision would be
perverse and liable to be set aside on the ground of patent
illegality. Additionally, a finding based on documents taken
behind the back of the parties by the arbitrator would also
qualify as a decision based on no evidence inasmuch as
such decision is not based on evidence led by the parties,
and therefore, would also have to be characterized as
perverse.
*
69. We therefore hold, following the aforesaid authorities,
that in the guise of misinterpretation of the contract, and
consequent errors of jurisdiction, it is not possible to state
that the arbitral award would be beyond the scope of
submission to arbitration if otherwise the aforesaid
misinterpretation [which would include going beyond the
terms of the contract], could be said to have been fairly
comprehended as disputes within the arbitration agreement
or which were referred to the decision of the arbitrators as
understood by the authorities above. If an arbitrator is
alleged to have wandered outside the contract and dealt
with matters not allotted to him, this would be a
jurisdictional error which could be corrected on the ground
of patent illegality, which, as we have seen, would not
apply to international commercial arbitrations that are
decided under Part II of the 1996 Act. To bring in by the
back door grounds relatable to Section 28 (3) of the 1996
Act to be matters beyond the scope of submission to
arbitration under section 34(2)(a)(iv) would not be
permissible as this ground must be construed narrowly and
so construed, must refer only to matters which are beyond
the arbitration agreement or beyond the reference to the
arbitral tribunal.”
52. The legal position which emerges from the aforesaid
discussion is that after the ‘2015 amendments’ in Section 34
(2)(b)(ii) and Section 48(2)(b) of the 1996 Act, the phrase “in
conflict with the public policy of India” must be accorded a
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 18 of 43
restricted meaning in terms of Explanation 1. The expression “in
contravention with the fundamental policy of Indian law” by use
of the word ‘fundamental’ before the phrase ‘policy of Indian
law’ makes the expression narrower in its application than the
phrase “in contravention with the policy of Indian law”, which
means mere contravention of law is not enough to make an
award vulnerable. To bring the contravention within the fold of
fundamental policy of Indian law, the award must contravene all
or any of such fundamental principles that provide a basis for
administration of justice and enforcement of law in this country.
Without intending to exhaustively enumerate instances of such
contravention, by way of illustration, it could be said that (a)
violation of the principles of natural justice; (b) disregarding
orders of superior courts in India or the binding effect of the
judgment of a superior court; and (c) violating law of India
linked to public good or public interest, are considered
contravention of the fundamental policy of Indian law. However,
while assessing whether there has been a contravention of the
fundamental policy of Indian law, the extent of judicial scrutiny
must not exceed the limit as set out in Explanation 2 to Section
34(2)(b)(ii).
Most basic notions of morality and justice
53. In Renusagar (supra) this Court held that an arbitral
award is in conflict with the public policy of India if it is, inter alia,
contrary to “justice and morality”. Explanation 1, inserted by
2015 Amendment, makes it clear that an award is in conflict with
the public policy of India, inter alia, if it conflicts with the ‘most
basic notions of morality or justice’.
Justice
54. Justice is the virtue by which the society/ court / tribunal
gives a man his due, opposed to injury or wrong. Justice is an act
of rendering what is right and equitable towards one who has
suffered a wrong. Therefore, while tempering justice with mercy,
the court must be very conscious, that it has to do justice in exact
conformity with some obligatory law, for the reason that human
actions are found to be just or unjust on the basis of whether the
same are in conformity with, or in opposition to, the law42.
Therefore, in ‘judicial sense’, justice is nothing more nor less than
exact conformity to some obligatory law; and all human actions
are either just or unjust as they are in conformity with, or in
opposition to, the law43.
55. But, importantly, the term ‘legal justice’ is not used in
Explanation 1, therefore simple conformity or nonconformity with
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 19 of 43
the law is not the test to determine whether an award is in conflict
with the public policy of India in terms of Explanation 1. The test is
that it must conflict with the most basic notions of justice. For lack
of any objective criteria, it is difficult to enumerate the ‘most basic
notions of justice’. More so, justice to one may be injustice to
another. This difficulty has been acknowledged by many renowned
jurists, as is reflected in the observations of this Court in Delhi
10
Administration v. Gurdip Singh Uban , extracted below:
“23. The words ‘justice’ and ‘injustice’, in our view, are
sometimes loosely used and have different meanings to
different persons particularly to those arrayed on opposite
sides. One man's justice is another's injustice [Raplph
Waldo Emerson: Essays (1803-82), First Series, 1841,
“Circles]. Justice Cardozo said: “The web is entangled
and obscure, shot through with a multitude of shades and
colors, the skeins irregular and broken. Many hues that
seem to be simple, are found, when analyzed, to be a
complex and uncertain blend. Justice itself, which we are
wont to appeal to what as a test as well as an ideal, may
mean different things to different minds and at different
times. Attempts to objectify its standards or even to
describe them have never wholly succeeded (Selected
Writings of Cardozo, pp 223-224, Falcon Publications,
1947).”
56. In Associate Builders (supra), while this Court was dealing
with the concept “public policy of India”, in the context of a
Section 34 challenge prior to 2015 amendment, it was held that an
award can be said to be against justice only when it shocks the
conscience of the court. The Court illustrated by stating that where
an arbitral award, without recording reasons, awards an amount
much more than what the claim is restricted to, it would certainly
shock the conscience of the court and render the award vulnerable
and liable to be set aside on the ground that it is contrary to
justice.
57. In Ssyangyong (supra), which dealt with post 2015
amendment scenario, it was observed that an argument to set aside
an award on the ground of being in conflict with ‘most basic
notions of justice’, can be raised only in very exceptional
circumstances, that is, when the conscience of the court is shocked
by infraction of some fundamental principle of justice. Notably, in
that case the majority award created a new contract for the parties
by applying a unilateral circular, and by substituting a workable
formula under the agreement by another, dehors the agreement.
10
(2000) 7 SCC 296
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 20 of 43
This, in the view of the Court, breached the fundamental principles
of justice, namely, that a unilateral addition or alteration of a
contract can never be foisted upon an unwilling party, nor can a
party to the agreement be liable to perform a bargain not entered
with the other party. However, a note of caution was expressed in
the judgment by observing that this ground is available only in
very exceptional circumstances and under no circumstance can
any court interfere with an arbitral award on the ground that
justice has not been done in the opinion of the court because that
would be an entry into the merits of the dispute.
58. In the light of the discussion above, in our view, when we
talk about justice being done, it is about rendering, in accord with
law, what is right and equitable to one who has suffered a wrong.
Justice is the virtue by which the society/ court / tribunal gives a
man his due, opposed to injury or wrong. Dispensation of justice in
its quality may vary, dependent on person who dispenses it. A
trained judicial mind may dispense justice in a manner different
from what a person of ordinary prudence would do. This is so,
because a trained judicial mind is likely to figure out even minor
infractions of law/ norms which may escape the attention of a
person with ordinary prudence. Therefore, the placement of words
“most basic notions” before “of justice” in Explanation 1 has its
significance. Notably, at the time when the 2015 Amendment was
brought, the existing law with regard to grounds for setting aside
an arbitral award, as interpreted by this Court, was that an
arbitral award would be in conflict with public policy of India, if it
is contrary to: (a) the fundamental policy of Indian law; (b) the
interest of India; (c) justice or morality; and /or is (d) patently
illegal. As we have already noticed, the object of inserting
Explanations 1 and 2 in place of earlier explanation to Section
34(2)(b)(ii) was to limit the scope of interference with an arbitral
award, therefore the amendment consciously qualified the term
‘justice’ with ‘most basic notions’ of it. In such circumstances,
11
giving a broad dimension to this category would be deviating
from the legislative intent. In our view, therefore, considering that
the concept of justice is open-textured, and notions of justice could
evolve with changing needs of the society, it would not be prudent
to cull out “the most basic notions of justice”. Suffice it to observe,
12
they ought to be such elementary principles of justice that their
violation could be figured out by a prudent member of the public
who may, or may not, be judicially trained, which means, that their
violation would shock the conscience of a legally trained mind. In
other words, this ground would be available to set aside an
arbitral award, if the award conflicts with such elementary/
11
In conflict with most basic notions of justice
12
Most basic notions of justice
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 21 of 43
fundamental principles of justice that it shocks the conscience of
the Court.
Morality
59. The other ground is of morality. On the question of
morality, in Associate Builders (supra), this Court, after referring
to the provisions of Section 23 of the Contract Act, 1872; earlier
decision of this Court in Gherulal (supra); and Indian Contract Act
by Pollock and Mulla, held that judicial precedents have confined
morality to sexual morality. And if ‘morality’ were to go beyond
sexual morality, it would cover such agreements as are not illegal
but would not be enforced given the prevailing mores of the day.
The court also clarified that interference on this ground would be
only if something shocks the court’s conscience”.
54. A plain reading of the above, makes it easy to understand that
an arbitral award cannot be set aside simply because the arbitrator has
committed an error of law, or interpreted a contract incorrectly. The
Hon’ble Supreme Court held that the error must cross a significatory
high statutory threshold, so as to be amenable to the Court under
section 34 of the Act. The Hon’ble Supreme Court explained that the
2015 Amendment deliberately narrowed the meaning of “ public policy
of India ” to prevent Courts from effectively hearing arbitration
disputes all over again.
55. The Hon’ble Supreme Court clarified,that “fundamental policy
of Indian law” does not mean every provision of law, instead, it refers
to the foundational principles on which the system operates. The
Court gave three such example such as (i) natural justice, (ii)
obedience to binding judgments of superior Courts, and (iii)
compliance with laws protecting public interest. Therefore, any
statutory violation is insufficient unless it undermines such a
fundamental principle.
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 22 of 43
56. Further, the Hon’ble Supreme Court explained that the, “most
basic notions of morality or justice” does not permit interference
merely because the Court believes the award is unfair. The injustice
must be so fundamental that it shocks the conscience of the Court.
57. Thus, having understood the principles governing Section 34
Court for interference with international commercial arbitral awards,
let us now turn to the question that falls for determination in the
present case.
58. After going through the submission on both sides and having
gone through the arbitral award, the issue which arises for
consideration in the present matter is whether the learned Arbitral
Tribunal, while interpreting Articles 2.5 and 34 of the SPSHA and
rejecting MMTC’s claim for restitution, contravened the fundamental
policy of Indian law or conflicted with the most basic notions of
morality or justice, as understood in the preceding paragraphs.
59. Before adverting to the question as to whether any interference
is warranted in the present matter, it would be profitable to refer to
Articles 2.5 and 34, which are extracted hereinbelow:
“2.5 Further to Article 2.4 and without limitation or prejudice to
the generality of Article 2.3, MMTC and PAMP shall therefore
have the following obligations:
(a) Responsibilities of MMTC:
1. Make its timely contribution to the capitalization of MPIPL as
detailed in Article 4.3 hereunder.
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 23 of 43
2. Assist MPIPL in the marketing, selling and distribution of the
products manufactured by MPIPL on the domestic and export
markets.
3. Interact with various agencies / departments of the Central /
relevant State Government with a view to obtain timely allocation
of the total land requirements of MPIPL on most favourable terms.
4. Interact with various agencies / departments of the Central /
relevant State Government with a view to obtain most favourable
terms for all matters related to the smooth functioning of MPIPL.
5. Interact with the Central Government Ministries / Departments
with a view to rectify the current inverse import duty on import of
gold dore (import duty on the raw material is higher than the
import duty on the finished product). For the avoidance of doubt
any duty or reimbursement of the same will be for the account of
MPIPL.
6. As a Nominated Agency, make available to MPIPL continuous
and adequate supply of gold and silver of the quality and quantity
required by MPIPL on mutually agreed terms that are not less
favourable than those that may otherwise be available to MPIPL.
7. Assist MPIPL in its dealings with various vendors in India
relating to the continuous supply and acquisition of all materials
and products used by it during both the construction phase as well
as the regular operating phase of the Manufacturing Plant.
8. Assist the project consultants in India, in any matter concerning
the timely delivery of the construction of the Manufacturing Plant
building and related facilities in accordance with the equipment
and technology designs for the project.
9. Assist MPIPL in obtaining necessary approvals for any overseas
personnel deployed for the project.
10. Assist MPIPL in structuring and implementing a competitive
financial package for the funding of the project, including working
capital, and to obtain approval of the financial package by
concerned financial institutions.
(b) Responsibilities of PAMP:
1. Make its timely contribution to the capitalization of MPIPL as
detailed in Article 4.3 hereunder.
2. Assist MPIPL with specifications, setting forth the design and
technology required for achieving the objectives. The
Manufacturing Plant shall be implemented accordingly, within the
scope of the total investment.
3. Assist MPIPL in sourcing, procuring and purchasing equipment,
raw materials and other products in accordance with the
specifications of the Manufacturing Plant and in the delivery of the
same to the Indian Ports as so designated.
4. Assist MPIPL in locating, accessing, recruiting and hiring
experienced personnel, including managerial personnel on
acceptable terms.
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 24 of 43
5. Assist MPIPL in marketing, selling and distributing its products
in the domestic and export markets.
6. Assist MPIPL in its dealings with the project consultants in
India on all matters relating to the timely delivery of the
Engineering, procurement, construction, installation and
commissioning phases of the project.
7. Provide, under licence, MPIPL with the process know-how to
facilitate the operation of the Manufacturing Plant.
8. Assist MPIPL for the installation, testing, commissioning and
operation of the Project.
(c) Responsibilities of MPIPL:
1. Issue and allot Shares of MPIPL to MMTC up to 26% at par
value after getting all due approvals.
2. Issue and allot Shares of MPIPL to MMTC Employees Entity up
to 2% at par value after getting all due approvals.
3. Issue and allot Shares of MPIPL to PAMP / its nominees up to
72% at par value after getting all due approvals.
4. Provide assistance for such other matters as may be agreed in
writing between PAMP, MMTC and MPIPL from time to time.
5. Subject to qualifications and suitability, give preference to
recruitment of MMTC's employee for operations at various levels
as per requirement.
6. Procurement of all equipment / products shall be transparent
especially where the value exceeds Rs.50,00,000.00 (Rupees Fifty
Lacs Only).
7. Project Team:
a. During the implementation phase of the Project, set up a Project
Team consisting of representatives of the Parties from various
disciplines including technical and financial and project
management / monitoring.
b. The Project Team will function as a professional subcommittee
and be headed by and to report to the Managing Director / CEO or
such other official authorized by him. The Project Team will
dissolve following commissioning of the project. The remuneration
of the Project Team will be considered as preliminary and pre-
operative expenses included in the total cost of the project.
c. The Project Team will be responsible for:
• Detailed checking of the design
• Signing contracts
• Controlling the purchasing and inspection of the
equipment and all materials for the Project.
• General schedule of Project implementation.
• Financial planning
• Control, disbursement and final approval of expenses
• Complying with all regulations
• Keeping and maintaining the documentation, drawings,
files and information of the Project during the project
implementation period”
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 25 of 43
Article 34
Good Faith
34.1 All transactions entered into between either Party [or any
company Controlled by it] and MPIPL shall be conducted in good
faith and on the basis set out or referred to in this Agreement or, if
not provided for in this Agreement, as may be agreed by the
Parties and, in the absence of such agreement, on an arm's length
basis.
34.2 Each party shall at all times act in good faith towards the
other and shall use all reasonable endeavours to ensure that this
Agreement is observed.
34.3 Each party shall do all things necessary and desirable to give
effect to the spirit and intention of this Agreement.”
60. It is clear from the above reading that Article 2.5 stipulates how
MMTC, PAMP and MPIPL are expected to work together to establish
and operate the manufacturing plant. These articles makes it clear that
while both MMTC and PAMP must contribute capital and support the
business, however, their roles are different.
61. As per Article 2.5, MMTC is mainly expected to help MPIPL
with government matters, and ensure the availability of gold and
silver, and assist in arranging funding and developing the business in
India. On the other hand, PAMP, is expected to bring the technical
expertise needed to establish the plant and support its operations
through technology, and process know-how.
62. On a reading of Article 34, it makes it clear that the parties must
carry out these responsibilities honestly and in good faith, and with a
genuine intention to fulfil the purpose of the agreement. Further, any
transactions involving MPIPL and either party or its controlled
companies must follow the agreed terms or, where no terms have been
agreed, be conducted on a fair, arm's-length basis.
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 26 of 43
63. Having understood the relevant contractual mechanism
governing the present issue, let us go through the findings of the
arbitral tribunal on the issue in consideration:
“276 In its SOC, MMTC pleads that for the purpose of operating
MPIPL's refining and minting plant set up under the SPSHA,
PAMP/PHML assumed the obligation under Art 2.5 to source Dore
for and to provide process knowhow to MPIPL free of charge for
the following reasons:
(a) MMTC agreed to enter into the joint venture on PAMP's
representations that it would supply the necessary process
know-how and commercial expertise to establish and
operate a refinery, free of cost to MPIPL in consideration
of PAMP being allotted a 72% shareholding in MPIPL.
(b) MMTC's consent to the framework of the transaction
was obtained on the express representation that without
any monetary consideration, the brand, the commercial
expertise and the technology of PAMP would be made
available to MPIPL.
(c) The SPSHA did not recognise or permit any
consideration being paid to either shareholder for making
available any technology, expertise or other assistance to
MPIPL.
(d) It was on this basis that MMTC agreed to a 26% stake
in MPIPL.
277 Accordingly, MMTC's case against PHML is that that
MPIPL has been wrongfully charged the Dore charges under the
DSA and the process know-how fee under the Licence Agreement.
MMTC alleges that MPIPL was compelled to enter into the two
agreements by PHML using the majority votes of its nominee
directors in violation of Art 2.5.
278 On this basis, MMTC seeks the following reliefs under
[7.1] of the SOC, inter alia:
(a) A declaration to the effect that the DSA was illegal and
as also being violative of the SPSHA and/or contrary to the
representations made, and hence the DSA is void.
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 27 of 43
(b) A declaration to the effect that the Licence Agreement
was illegal as also being violative of the SPSHA and/or
contrary to the representations made, and hence the
Licence Agreement is void.;
(c) A direction to PHML to secure the modification of the
DSA and the Licence Agreement or their cancellation or
substitution with new agreements by deleting the obligation
of MPIPL to pay the Dore charges and licence fees to MKS
Swiss and PAMP.
(d) A direction to PHML to restitute MPIPL by paying an
amount equal to the sums received by MKS Swiss and
PAMP under the DSA and the Licence Agreement,
respectively, being Rs 71,25,10,588 up to 31 March 2015
and any further sums paid thereafter;
(e) A direction to PHML to direct its directors to pass a
resolution to repatriate and disgorge the amounts already
remitted under the DSA and Licence Agreement to MKS
Swiss and PAMP.
(f) In the alternative, direct PHML to take steps to recover
the amounts remitted to MKS Swiss and PAMP.
MMTC's claims for declarations, cancellation and modification of
the DSA and the Licence Agreement
277 In the course of the proceedings, counsel for MMTC
appears to have conceded that MMTC is not entitled to the reliefs
sought at (a), (b) and (c) at [3] above (see [224] above). In the
event that this is not the case, the Tribunal agrees with the
submissions of PHML and MPIPL that MMTC is not entitled to
those reliefs for the following reasons:
(a) MKS Swiss and PAMP are not parties to this
arbitration. Accordingly, the Tribunal has no power to
grant any of the orders or directions sought by MMTC to
declare the DSA or the Licence Agreement void on the
ground of illegality or being in violation of Art 2.5.
(b) For the same reason, the Tribunal has no
jurisdiction/power to direct to PHML to secure the
modification of the DSA and the Licence Agreement or
their cancellation or substitution with new agreements by
deleting the obligation of MPIPL to pay the Dore charges
and licence fees to MKS Swiss and PAMP.
278 For these reasons, the Tribunal has no jurisdiction/power
to grant any orders or directions with respect to the rights and
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 28 of 43
interests ofMKS Swiss and PAMP under the DSA and the Licence
Agreement, respectively, unless they are parties to the arbitration.
279 The Tribunal, having considered the rival arguments of the
Parties, agree with the submissions of PHML and MPIPL that
MMTC's claims for these reliefs are misconceived and should be
dismissed.
MMTC's claim against PHML for restitution
280 MMTC seeks an order of restitution against PHML of the
Dore charges and licence fees paid by MPIPL to MKS Swiss and
PAMP under the DSA and the Licence Agreement respectively.
Since PHML is not a party to either agreement and has not
received any of these payments from MPIPL, there is no legal basis
for the Tribunal to grant an order for restitution against PHML.
MMTC has cited no statutory or case authority in support of its
claim.
281 Secondly, since MPIPL has not made any claim against
either MKS Swiss or PAMP for the return of these payments, there
is no legal basis upon which MMTC can make a claim, so to speak,
on behalf of MPIPL. MMTC is only entitled to do so by way of a
derivative action which it has not mounted, and which is, in any
case, outside the scope of the arbitration agreement in Art 26.
282 The Tribunal, having considered the rival arguments of the
Parties, agree with the submissions of PHML and MPIPL that
MMTC's claim for an order of restitution against PHML is
groundless and should be dismissed
283 In its written Closing Submissions, MMTC limited its claim
for restitution against PHML on the following grounds:
(a) Under Art 2.5, PHML (as PAMP's successor in interest)
agreed to source Dore and provide process know-how to
MPIPL free of charge. To avoid its contractual obligations,
PHML used its control over MPIPL, i.e., compelled
MPIPL, to wrongly commit MPIPL to paying the Dore
charges and the licence fees to MKS Swiss and PAMP
under the DSA and the Licence Agreement respectively.
(b) In contrast, in its oral submission, MMTC submitted
that PHML was in breach of Art 2.5 because it had
arranged for its parent company PAMP to charge MPIPL
under the Licence Agreement. MMTC has a claim for
damages. Restitution is a form of damages. As punitive and
exemplary damages are not allowed under Indian law, the
only damages are those that will restore the claimant to its
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 29 of 43
original position. MMTC cannot ask PHML for 26% of the
fee, but it could get it through dividends, for which it has to
pay tax. MMTC has asked for a more reasonable relief
which is: Put it in the same position as if the agreement had
been performed.
(c) PHML's action was in violation of Art 2.5 and resulted
in MPIPL having to incur payments it would not have had
to pay if PHML had performed its obligations under Art
2.5. MPIPL has accordingly suffered financial loss
equivalent to the fees paid to MKS Swiss and PAMP, and is
entitled to be restored to its financial position on the basis
that no breach had occurred.
(d) PHML is therefore liable to restore or restitute these
payments as "restitutionary damages"
284 In essence, MMTC's claim is that PHML was in breach of
Art 2.5 in failing to assist MPIPL to procure Dore and to obtain
process know-how to mint gold medallions free of cost or to
provide both Dore and/or process know-how free of any service
charge. However, to sustain this claim, MMTC should have made a
claim against PHML for damages for breach of contract. MMTC
has not done so.
285 If it had done so, PHML would be entitled to plead that
MMTC has suffered no loss, and put MMTC to prove its loss, if
any. Furthermore, PHML would be entitled to plead that MMTC's
claim for damages, with respect to the Dore charges, is barred by
limitation as the Notice of Arbitration was issued more than three
(3) years after the execution of the DSA.
286 The Tribunal, having considered the rival arguments of the
Parties, agree with the submissions of PHML and MPIPL that
MMTC in failing to claim against PHML for damages for breach
of contract has no legal basis to claim damages as "restitutionary
damages" which in essence are damages and not restitution of ill-
gotten gains or under or subject to the relevant provisions of the
ICA.
Other Issues
287 In the light of the above conclusions on MMTC's
misconceived claims for the reliefs set out in its SOC, it is, strictly
speaking, not necessary for the Tribunal to address the other issues
of fact and law raised by MMTC. However, since MMTC has
pleaded them and cross-examined the witnesses of PHML and
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 30 of 43
MPIPL on their testimonies, the Tribunal considers it desirable to
make findings of these issues.
(1) Scope of Art 2.5.2(h) and Art 2.5(7)
288 Having considered the evidence and the arguments of counsel
which have been extensively set out earlier in this Award, the
Tribunal finds that as a matter of documentary construction, Art
2.5(b) does not provide or intended to provide that PAMP or its
permitted assigns are under an obligation to discharge their
obligations thereunder free of charge, whether it is to assist in
sourcing Dore or in providing know-how to MPIPL for the
following reasons:
(a) Article 2.5(b) does not expressly or impliedly provide
that for such obligations to be performed free of charge. It
is a neutral statement in the context of a commercial
agreement. When parties enter into a joint venture, they
either subscribe to the required capital by infusion of cash
or assets in exchange for equity capital or they raise the
capital for its operations by loans from commercial lenders
or the company issues bonds or preference shares. Where
the capital is raised in cash, the capital will be used to
acquire the materials and/or services to build the plant, and
to operate the business.
(b) The capital provided by the shareholders is deployed
for these purposes. In the present case, both MMTC and
PAMP subscribed for their equity shares in cash.
(c) That is why in joint ventures project reports and
business plans have to be prepared and agreed upon by the
joint investors to determine what has to be done and how
much capital is necessary to bring the joint venture into
operation and to sustain its business. All services and
equipment have to be purchased by the joint venture,
whether from the joint venture parties or third parties.
Unless the joint venture agreement provides otherwise, all
services and things provided by either joint venture party
has to be paid for.
(d) These principles accord with business practice in all
commercial ventures.
(e) Based on these common-sense commercial
considerations, Art 2.5(b) 2,3,4, 5, 6, 7 and 8 cannot be
interpreted to mean that PAMP will provide services and
know-how to MPIPL free of charge. Neither can Art 2.5(a)
with reference to the services to be provided by MMTC.
Services rendered have to be paid for. That this is what Art
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 31 of 43
2.5 means is confirmed by the fact that MMTC itself
charged for services it had rendered to MPIPL in providing
exhibition space for MPIPL's products, and also in
sourcing gold for MPIPL.
(f) For these reasons, the Tribunal holds that the Parties to
the SPSHA are entitled to charge for services and things to
be provided by them to MPIPL.
(g) The Tribunal's interpretation of Art 2.5 is also
supported by Art 34. If services and intellectual property
rights are to be provided free of charge, Art 34 would be
otiose. It would serve no purpose. The scope of Art 34 is
discussed below.
(2) Scope of Art 34 - Party-related transactions
289 The DSA and the Licence Agreement are transactions
falling within Art 34.1 because MPIPL is a Party to both
agreements. Article 34.1 provides for party-related transactions. It
reads: "All transactions entered into between either Party [or any
company controlled by it] shall be conducted in good faith and on
the basis set out in this Agreement or, if not provided for in this
Agreement, as may be agreed by the Parties and, in the absence of
such agreement, on an arm's length basis."
290 MMTC interprets Art 34.1 to consist of three limbs: (1) all
transactions have to be on the basis set out or referred to in the
SPSHA; (2) transactions not provided for in the SPSHA as may be
agreed by the Parties; and (3) in the absence of such agreement
(including as to the terms), on an arm's length basis. MMTC
argues that since the DSA and the Licence Agreement are covered
by the SPSHA, limbs (b) and (c) are not applicable.
291 On this basis, MMTC argues that the DSA and the Licence
Agreement were not executed in good faith because MMTC was
not consulted on its need and its terms. The DSA was disclosed to
MMTC only a few months later its execution. MMTC also
suggested that the DSA was executed just before the Indian
Government removed the inverted tax on Dore to facilitate the
import of Dore into India for refining and minting of gold
medallions by MPIPL. Similarly, the Licence Agreement was also
not executed in good faith. Both agreements were executed in
violation of Art 2.5 as PHML compelled MPIPL to execute them
through the votes of its majority directors on the Board of MPIPL
292 PHML's argues that both the DSA and the Licence
Agreement were entered in good faith. The nature of the business is
such that MPIPL needed Dore for its plant on a continuous basis.
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 32 of 43
It was not able to import Dore on its own as the gold mining
companies would not supply Dore to MPIPL direct. The evidence
shows that MMTC was also not in a position to supply Dore to
MPIPL. If MKS Swiss had not agreed to supply Dore to MPIPL,
the joint venture would have collapsed. MPIPL also needed
PAMP's process knowhow, without which it could not mint any
gold coins for the Indian market.
293 PHML further argues that the second and third limbs are
applicable and that the amount of Dore charges and licence fees
for the process knowhow were negotiated at arm's length as they
were below market rates.
294 Having considered the arguments of the Parties, the
Tribunal is of the view that all the three limbs apply to the DSA
and the Licence Agreement. Although the DSA and the Licence
Agreement are "transactions entered into" under the SPSHA, there
was no agreement on their terms. The Parties had to agree on the
terms of the Dore sourcing and the provision of knowhow. The
Parties have agreed to the terms. However, since, and on the basis
of, MMTC's arguments that the terms were unfavourable to MPIPL
and should not be sanctioned, the Parties will have to fall back on
the test of arm's length. In this respect, the Tribunal is fully
satisfied that the terms were at arm's length. MMTC has produced
no evidence whatever to show otherwise.
295 In any event, even if the DSA and the Licence Agreement
fall foul of Art 34.1, it has no legal consequences in this
arbitration. The Tribunal has no jurisdiction/power to modify their
terms or set them.
Position of MPIPL
296 Although MPIPL is a "Party" to the SPSHA, and therefore
is a "Party" for the purpose of Art 26 (the arbitration agreement),
it has no substantive rights or obligations vis-a-vis MMTC or
PHML. Furthermore, there is no claim dispute, question or
controversy arising out of or in connection with the SPSHA
involving MPIPL. Accordingly, MPIPL should not have been made
a party to these proceedings.
297 Furthermore, Art 26 does not permit either MMTC or
PHML to claim any relief against MPIPL. Article 26.2.3 provides
that the arbitration award is final and binding on the
Shareholders", viz, MMTC and PHML. MPIPL, as the joint
venture company, is not, and cannot be a party to any arbitration
award. It follows that the Tribunal has no jurisdiction to order or
direct MPIPL to do or omit to do anything in relation to the
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 33 of 43
dispute between MMTC and PHML in relation to the DSA and the
Licence Agreement.
298 For these reasons, MPIPL has been wrongly joined as a
party to these proceedings.
D Costs of arbitration
299 The Indian law on costs of arbitration is set out in s 31 of
the Arbitration Act. Xiv
300 MMTC, PHML and MPIPL have made submissions on
their respective liability to pay the costs of arbitration as defined in
s 31. The Tribunal has the discretion to determine whether costs
are payable, and which party should pay the costs and in what
proportions. The general rule is that costs follow the event, i.e., the
unsuccessful party pays the costs of the successful party. The
successful parties in this arbitration are PHML and MPIPL.
301 The Tribunal is unable to find any reason why the general
rule should not apply to this arbitration. Indeed, the Tribunal finds,
that having regard to the delay of MMTC in invoking this
arbitration against PHML, and the fact that its claims and reliefs
against PHML were non-starters, and its joinder of MPIPL as a
party to the arbitration was also wholly misconceived, the
application of the general rule is more than justified.”
64. Having gone through the analysis of the learned arbitral
tribunal, it can be made out that although, the learned Arbitral
Tribunal considered the requirement of good faith under Article 34.1
of the SPSHA of the Award. However, it did not return any finding
pertaining to it.
65. MMTC specifically contended that the DSA and Licence
Agreement were not entered into in “Good faith”, as MMTC was not
consulted regarding their necessity and terms and was not informed of
the DSA until several months after its execution, and PHML allegedly
used its majority control over MPIPL’s Board to procure their
execution.
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 34 of 43
66. In this regard, although the Tribunal acknowledged these
contentions and reproduced Article 34.1, which expressly required
transactions to be conducted in good faith, in view of this Court,
however, the analysis of the learned arbitral tribunal focused primarily
on whether the transactions were conducted on an arm’s-length basis
or not.
67. The learned Arbitral Tribunal concluded that the agreements
were entered into on arm’s-length terms and that MMTC had failed to
produce evidence to the contrary. However, the learned Arbitral
Tribunal failed to determine whether the alleged conduct of MPIPL
satisfied the explicit contractual requirement of “Good faith”. Thus,
while the Tribunal superficially considered Article 34.1, but it did not
return a definitive finding on the alleged breach of the “Good faith”
contractual obligation. According to this Court, the requirement and/or
compliance with the “Good Faith” was a mandatory condition
precedent to adjudication on the arm’s length nature of the transaction,
which was conspicuously ignored by the Ld. Tribunal.
68. Upon a consideration of the findings returned by the Arbitral
Tribunal and the reasoning underlying the same, it emerges that
fulfilment or adherence to contractual obligation of “Good faith” was
not independently adjudicated upon.
69. In light of the above, this Court is now brought to the next
pivotal question as to whether the learned Arbitral Tribunal's failure to
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 35 of 43
address such a contractual obligation under Article 34 constitutes a
ground for interference with the award.
70. At this juncture, the judgment rendered by the Division Bench
13
in Ssangyong Engineering & Construction Co. Ltd. v. NHAI ,
would serve as a guiding light to determine whether the non-
consideration of the contractual obligation of “Good faith” would
trigger any ground for interference or not. The relevant paras for the
same are reproduced below.
“36. The distinction between an erroneous adjudication of an
issue, by the Arbitral Tribunal, and a failure to adjudicate an
issue submitted to arbitration is material. The failure to
adjudicate the matters that have been submitted to the Arbitral
Tribunal would make the impugned Award vulnerable to
challenge under Section 34(2)(a)(iv) of the Act of 1996 if it
results in prejudice to the parties to the dispute. In Ssangyong
Engineering & Construction Co. Ltd. v. National Highways
Authority of India ((2019) 15 SCC 131), while considering Article
34(2)(a)(iii) of the UNCITRAL Model Law which corresponds to
Section 34(2)(a)(iv) of the Act of 1996, the Supreme Court cited
with affirmation the judgment of Court of Appeal of Singapore, in
CRW Joint Operation v. PT Perusahaan Gas Negara (Persero)
TBK (2011 SGCA 33), which held that the said provision of
UNCITRAL Model Law applies not only where an arbitral tribunal
improperly decides matters which had not been submitted to it, but
also where it ‘failed to decide matters that had been submitted to
it’, since in either situation the tribunal has exceeded or failed to
exercise the authority conferred upon it by the parties. The Court
of Appeal at Singapore clarified that failure to deal with every
issue referred to the tribunal would not, by itself, warrant setting
aside an award; the crucial consideration is whether such failure
has resulted in real or actual prejudice to a party. The relevant
portion of the judgment reads as under: - “61. The Court of Appeal
of Singapore, in CRW Joint Operation v. PT Perusahaan Gas
Negara (Persero) TBK , held as follows: “25. The court's power to
set aside an arbitral award is limited to setting aside based on the
grounds provided under Article 34 of the Model Law and Section
24 of the IAA. As declared by this court in Soh Beng Tee & Co.
(Pte) Ltd. v. Fairmount Development (Pte) Ltd. [ Soh Beng Tee &
13
2026:DHC:6687-DB
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 36 of 43
Co. (Pte) Ltd. v. Fairmount Development (Pte) Ltd. ((2007) 3 SLR
(R) 86), SLR(R) para 59 (“Soh Beng Tee”), the current legal
framework prescribes that the courts should not without good
reason interfere in the arbitral process. This policy of minimal
curial intervention by respecting finality in the arbitral process
acknowledges the primacy which ought to be given to the dispute
resolution mechanism that the parties have expressly chosen.
26. However, it has also been said (correctly) that no State will
permit a binding arbitral award to be given or enforced within its
territory without being able to review the award, or, at least,
without allowing the parties an opportunity to address the court if
there has been a violation of due process or other irregularities in
the arbitral proceedings [see Peter Binder, International
Commercial Arbitration and Conciliation in UNCITRAL Model
Law Jurisdictions (Sweet & Maxwell, 3rd Edn., 2010) at para 7-
001].
27. While the Singapore courts infrequently exercise their power to
set aside arbitral awards, they will unhesitatingly do so if a
statutorily prescribed ground for setting aside an arbitral award is
clearly established. The relevant grounds in this regard can be
classified into three broad categories [see generally Nigel
Blackaby et al, Redfern and Hunter on International Arbitration
(Oxford University Press, 5th Edn., 2009) (“Redfern and Hunter”)
at paras 10.30-10.86]. First, an award may be challenged on
jurisdictional grounds (i.e. the non-existence of a valid and binding
arbitration clause, or other grounds that go to the adjudicability of
the claim determined by the Arbitral Tribunal). Second, an award
may be challenged on procedural grounds (e.g. failure to give
proper notice of the appointment of an arbitrator), and, third, the
award may be challenged on substantive grounds (e.g. breach of
the public policy of the place of arbitration).”
*
31. It is useful, at this juncture, to set out some of the legal
principles underlying the application of Article 34(2)(a)(iii) of the
Model Law. First, Article 34(2)(a)(iii) is not concerned with the
situation where an Arbitral Tribunal did not have jurisdiction to
deal with the dispute which it purported to determine. Rather, it
applies where the Arbitral Tribunal improperly decided matters
that had not been submitted to it or failed to decide matters that
had been submitted to it. In other words, Article 34(2)(a)(iii)
addresses the situation where the Arbitral Tribunal exceeded (or
failed to exercise) the authority that the parties granted to it (see
Gary B. Born, International Commercial Arbitration (Wolters
Kluwer, 2009) at Vol. 2, pp. 2606-07 and 2798-99). This ground
for setting aside an arbitral award covers only an Arbitral
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 37 of 43
Tribunal's substantive jurisdiction and does not extend to
procedural matters [see Robert Merkin& Johanna Hjalmarsson,
Singapore Arbitration Legislation Annotated (Informa, 2009)
(“Singapore Arbitration Legislation”) at p. 117].
32. Second, it must be noted that a failure by an Arbitral Tribunal
to deal with every issue referred to it will not ordinarily render its
arbitral award liable to be set aside. The crucial question in every
case is whether there has been real or actual prejudice to either
(or both) of the parties to the dispute. In this regard, the following
passage in Redfern and Hunter ([27] supra at para 10.40)
correctly summarises the position: The significance of the issues
that were not dealt with has to be considered in relation to the
award as a whole. For example, it is not difficult to envisage a
situation in which the issues that were overlooked were of such
importance that, if they had been dealt with, the whole balance of
the award would have been altered and its effect would have been
different. (emphasis added)
33. Third, it is trite that mere errors of law or even fact are not
sufficient to warrant setting aside an arbitral award under Article
34(2)(a)(iii) of the Model Law [see Sui Southern Gas Co. Ltd. v.
Habibullah Coastal Power Co. (Pte) Ltd. [ Sui Southern Gas Co.
Ltd. v. Habibullah Coastal Power Co. (Pte) Ltd. ((2010) 3 SLR 1),
(2010) 3 SLR 1], SLR paras 19-22]. In the House of Lords decision
of Lesotho Highlands Development Authority v. ImpregiloSpA
((2006) 1 AC 221: (2005) 3 WLR 129: 3 AII ER 789 (HL)), which
concerned an application to set aside an arbitral award on the
ground of the Arbitral Tribunal's “exceeding its powers” [see
Section 68(2)(b) of the Arbitration Act, 1996 (c 23) (UK) (“the UK
Arbitration Act”)], Lord Steyn made clear (at [24]-[25]) the vital
distinction between the erroneous exercise by an Arbitral Tribunal
of an available power vested in it (which would amount to no more
than a mere error of law) and the purported exercise by the
Arbitral Tribunal of a power which it did not possess. Only in the
latter situation, his Lordship stated, would an arbitral award be
liable to be set aside under Section 68(2)(b) of the UK Arbitration
Act on the ground that the Arbitral Tribunal had exceeded its
powers. In a similar vein, Article 34(2)(a)(iii) of the Model Law
applies where an Arbitral Tribunal exceeds its authority by
deciding matters beyond its ambit of reference or fails to exercise
the authority conferred on it by failing to decide the matters
submitted to it, which in turn prejudices either or both of the
parties to the dispute (see above at [31]).”
[Emphasis Supplied]
37. The obligation of the Arbitral Tribunal under the Act of 1996 to
adjudicate upon the defence raised by the Respondent is enshrined
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 38 of 43
in Section 18 and Section 34(2)(a)(iii) of the Act of 1996. The
Supreme Court in Associate Builders v. Delhi Development
Authority ((2015) 3 SCC 49 [Paragraph No. 30].) held that the
said provisions enshrine the fundamental juristic principles of
natural justice.
38. In our considered opinion, the jurisdiction of the Arbitral
Tribunal under Clause 2.6 of GCC to review the Certificate dated
31.08.2014 for its correctness had been invoked by the Appellant
itself in the SoC. The Respondent consented to this reference to
arbitration and submitted its SoD disputing the correctness of the
said Certificate and filing its objections to the said Certificate. The
Arbitral Tribunal was therefore obliged to decide the issue of the
correctness [or otherwise] of the Certificate dated 31.08.2014, on
the basis of the pleadings in the SoC and SoD as well as the
documents, even excluding the counter-claim. The absence of a
formal claim by the Respondent challenging the Certificate dated
31.08.2014 cannot be a justification for not adjudicating this issue,
as the challenge by the Respondent to the Certificate dated
31.08.2014 was unambiguous and clear in the notice dated
07.11.2016 issued by the Appellant invoking arbitration, and the
pleadings. Assuming a formal claim was required, since all
necessary pleadings and evidence were on record, the Arbitral
Tribunal ought to have permitted the Respondent to amend the
pleading to include such a formal claim. However, at the
culmination of the arbitral proceedings which spanned over 50
hearings, where arguments were addressed by parties on the
correctness [or otherwise] of the Certificate dated 31.08.2014, the
Arbitral Tribunal could not have declined to adjudicate this issue
on a thin premise of lack of a formal claim.
39. In our considered opinion, the Arbitral Tribunal’s conscious
omission to adjudicate upon the correctness [or otherwise] of the
Certificate dated 31.08.2014 not only violated the principles of
natural justice, as the Tribunal failed to adjudicate upon the
defense of the Respondent, but the impugned Award also violated
Section 34(2)(a)(iv) of the Act of 1996 read with Article
34(2)(a)(iii) of the UNCITRAL Model Law as the Tribunal had
abjectly failed to decide the dispute with respect to the correctness
[or otherwise] of the Certificate dated 31.08.2014 referred to it by
the parties .
40. The Respondent’s challenge to the correctness of the
Certificate dated 31.08.2014 questioned and disputed that the
Appellant was entitled to the balance amount claimed on the basis
of the said Certificate. By proceeding on the erroneous premise
that the said Certificate had not been challenged, the Arbitral
Tribunal failed to exercise the authority conferred upon it by the
parties, in respect of a material dispute submitted to it, thereby
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 39 of 43
causing prejudice to the Respondent. The impugned Award, to
that extent, is therefore unsustainable under Section 34(2)(a)(iii)
and Section 34(2)(a)(iv) of the Act of 1996. The non-adjudication
of a material defence also violates the basic requirement of a fair
adjudicatory process, and the impugned Award is in conflict with
the public policy of India under Section 34(2)(b)(ii) Explanation
(iii) of the Act of 1996 ”.”
71. A plain reading of the above, indicates that an Arbitral Tribunal
is obligated to adjudicate material disputes and defences submitted to
it, and a complete failure to decide such an issue, resulting in actual
prejudice to a party, may constitute a violation of natural justice and
the most basic notions of justice, warranting interference under
Section 34(2) of the Act.
72. The Division Bench of this Court drew a clear distinction
between incorrect adjudication and non-adjudication. It was held that
while an incorrect finding ordinarily cannot be reopened under
Section 34, however, a failure to decide material issue amounts to a
failure to exercise the jurisdiction entrusted to the Tribunal and may
attract Sections 34(2)(a)(iii), 34(2)(a)(iv) and 34(2)(b)(ii), read with
Explanation 1(iii).
73. Adverting to the facts of the present case, as it is understood
above that the material question or defence of “Good faith” left
unadjudicated. This Court puts a word of caution that, it is aware that
the mere absence of an express finding on “Good faith” would not be
sufficient if the Tribunal’s reasoning, read as a whole, effectively dealt
with that allegation. However, upon reading the award as a whole, it is
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 40 of 43
made out that the defence of the petitioner pertaining to “Good faith”
under Article 34 was completely left unadjudicated.
14
74. In OPG Power Generation v. Enexio , the Hon’ble Supreme
Court drew a distinction between inadequate reasoning and a complete
absence of intelligible reasoning on a material issue. MMTC’s
challenge is believable as the omission fell into the latter category,
which, in turn, further resulted in material prejudice. Thus, it can be
said that the same could be brought within the ground for interference
under Section 34.
75. MMTC had specifically alleged and raised a clear defence that
PHML abused its majority shareholding and caused MPIPL to enter
into associated party transactions in violation of Article 34. Against
this background, evaluating the defence of “Good Faith” became all
the more imperative for the Tribunal before characterizing the
transaction to be at arm’s length.Shockingly, the Arbitral Tribunal
completely failed to adjudicate the said vital issue. A holistic reading
of the impugned award, reveals a total failure to determine this
material allegation.
76. Furthermore, the aforesaid omission has resulted in material
prejudice, as the failure to adjudicate upon the “Goodfaith” defence
directly vitiated the tribunal’s final decision. Dehors any expression of
opinion on whether PAMP was contractually entitled to levy the
disputed fees or not, the quintessential issue that the learned arbitral
tribunal was bound to determine was whether PHML’s deployment of
14
(2025) 2 SCC 417
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 41 of 43
its majority control to orchestrate agreements benefiting PAMP's
associated companies conformed to the touchstone of good faith.
77. In the considered view of this Court, this constituted a
standalone and independent defence that imperatively required
adjudication. MMTC had expressly raised this plea before the learned
Arbitral Tribunal, anchoring it upon specific, material circumstances,
namely(i) the execution of the DSA behind its back (ii) the explicit
objections raised by its nominee directors regarding the licence fees,
and (iii) the transfer and restructuring of shareholdings within the
PAMP group alongside the alleged diversion of funds.
78. These specific circumstances bound the Tribunal to evaluate
and adjudicate them through the prism of Article 34, which explicitly
stipulated the standard of, “Good faith”.
79. MMTC's clear plea regarding the breach of “Good faith” was
never independently adjudicated. Even if one were to accept the
Tribunal’s view that the services in question were not intended to be
gratuitous, the total non-adjudication of his independent contractual
breach has caused grave material prejudice to MMTC, thereby
rendering the findings of the tribunal unsustainable.
G. Conclusion
80. Accordingly, the Impugned Award dated 11.12.2016 is set aside
to the extent that it dismisses MMTC’s surviving claims for breach of
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 42 of 43
the SPSHA and the related monetary relief, and consequently directs
MMTC to pay costs and expenses based on that dismissal.
81. The portions of the Award concerning prayers (a), (b) and (c),
which MMTC did not pursue before the Tribunal, shall remain
undisturbed.
82. The petition is partly allowed in the aforesaid terms. Pending
applications, if any, are accordingly disposed.
83. Needless to state, the parties are free to pursue any contractual
remedies or any remedy as available in law, concerning the surviving
dispute.
OM PRAKASH SHUKLA, J
NOVEMBER 03, 2026 /pa/gunn
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:46:03
O.M.P. (COMM) 188/2017 Page 43 of 43