Absolute obligation to insulate from recovery triggers immediate indemnity upon crystallisation of liability before any forum.

VPS/Medeor (Appellants) and the Promoters (Respondents) entered into a Share Purchase Agreement in 2016 to acquire Rockland Hospitals (renamed Medeor)

Disputes led to a Deed of Compromise (02.02.2019), which was incorporated into a Singapore International Arbitration Centre (SIAC) Consent Award dated 01.03.2019

Under Paragraph 32(a) of the Award, the Promoters undertook to defend certain litigations, including an arbitration with Ernst & Young (EY), and "ensure that no liability... is recovered from [VPS/Medeor] by the Forum"

Following an award in favor of EY for Rs. 10 Crores plus interest, Medeor challenged it under Section 34 of the Arbitration Act.

The Delhi High Court granted a stay subject to Medeor depositing the awarded amount

To prevent the execution sale of its assets, Medeor deposited Rs. 15,86,17,808/-

VPS/Medeor then sought to enforce the SIAC Consent Award against the Promoters to recover this sum.

The Delhi High Court deferred execution, ruling the petition premature because the EY Award had not yet been confirmed by the "Highest Court of Appeal"

1. Whether the obligation to protect the Appellants from liability under Paragraph 32(a) was an absolute obligation or a contingent indemnity triggered only after the final exhaustion of appeals

2. Whether the deposit of the awarded amount in court, to stay execution of an adverse award, constitutes "recovery" by a "Forum" under the Consent Award

3. Whether the requirement to discharge liability within 30 days of confirmation by the "Highest Court of Appeal" renders the immediate obligation to ensure no recovery otiose

The Court applied the principles of contractual construction for consent decrees and indemnity, governed by Sections 124 and 125 of the Indian Contract Act, 1872

It relied on the precedent in Khetarpal Amarnath v. Madhukar Pictures, which establishes that if a liability incurred by an indemnity-holder is absolute, they may call upon the indemnifier to meet that obligation before actual loss is realized

Regarding contract interpretation, the Court applied the "literal rule," "golden rule," and "purposive rule" as summarized in Annaya Kocha Shetty v. Laxmibai Narayan Satose

It further noted that commercial contracts must be strictly construed based on plain language, precluding courts from substituting words, as per Export Credit Guarantee Corporation of India Ltd. v. Garg Sons International

The Court analyzed Paragraph 32(a) by dividing it into five distinct "limbs"

It found that the High Court erred by focusing exclusively on the fifth limb (discharge within 30 days of Supreme Court confirmation) while ignoring the fourth limb, which mandated the Promoters "ensure that no liability... is recovered... by the Forum"

The Court held that the fourth limb created an "absolute obligation" rather than a "contingent obligation" because the word "ensure" implies immediacy

Since the contractual definition of "Forum" included any tribunal or court, the High Court's order requiring a deposit of Rs. 15.86 Crores constituted a "recovery" by a forum that crystallized the liability

The Court reasoned that interpreting the "Highest Court of Appeal" limb as a prerequisite for all payments would create a paradox: the Promoters could avoid liability indefinitely by simply choosing not to appeal to the highest court

Thus, the limbs must be read harmoniously; the immediate protection against recovery (Limb 4) operates independently of the final backstop guarantee (Limb 5)

It held that the Enforcement Petition was maintainable and not premature, as the liability against VPS/Medeor had crystallized when the forum compelled the deposit

The Court directed the Promoters to pay or deposit Rs. 15,86,17,808/- for the benefit of VPS/Medeor within 30 days

It further ordered that should the EY award be set aside in pending proceedings, the Promoters are entitled to encash the bank guarantee provided by EY in the High Court