Foreign-currency awards must be converted at the decree date, with currency clauses and interest limited by the contract and award text.

A contractual currency clause limited the fixed exchange rate to the rupee component of the payments, while the foreign-currency component remained separately governed by the contract's payment structure. The corrected award extended the enhanced exchange rate to the rupee payments as well, not merely to interest. For an arbitral award in foreign currency to be converted into a decree capable of execution, the foreign currency amount must be translated into Indian rupees at the rate prevailing on the date of the decree, or the nearest preceding proved date, subject to foreign exchange law. Interest was not payable on rupee claims where the award confined interest to French-franc amounts.

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Issues: (i) Whether the contractual conversion rate in the currency clause applied only to the rupee component of the payments or to all sums payable under the contract; (ii) whether the enhanced exchange rate fixed in the award applied only to interest or also to the rupee payments under the contract; (iii) what is the proper date for converting the foreign currency component of an award into Indian rupees for the purposes of a decree and execution; and (iv) whether the respondent was entitled to interest on the amounts claimed in rupees.

Issue (i): Whether the contractual conversion rate in the currency clause applied only to the rupee component of the payments or to all sums payable under the contract.

Analysis: The contract separately provided for payment in French francs and in Indian rupees. The exchange rate clause was attached to the portion payable in rupees and was intended to protect only that rupee component from fluctuation. The structure of the invoicing and payment clauses, and the supplementary provisions requiring refund in the same currency in which payment had originally been made, showed that the fixed rate was not meant to govern every payment under the contract.

Conclusion: The contractual rate applied only to the rupee component and not to all payments under the contract.

Issue (ii): Whether the enhanced exchange rate fixed in the award applied only to interest or also to the rupee payments under the contract.

Analysis: The erratum to the award made clear that the claim before the umpire was for an enhanced rate of exchange after devaluation, not merely for higher interest. The direction expressly stated that the rupee portion should be converted at the enhanced rate and that the rate would apply to both parties. The reasoning that the enhancement related only to interest was inconsistent with the text of the corrected award and with the treatment of the tax adjustments in the same erratum.

Conclusion: The enhanced exchange rate applied to the rupee payments and was not confined to interest.

Issue (iii): What is the proper date for converting the foreign currency component of an award into Indian rupees for the purposes of a decree and execution.

Analysis: The Court rejected the breach-date rule, the date of suit, and the date of execution as workable standards in Indian conditions. It also declined to adopt the date of award as the governing date in the context of a decree passed under section 17 of the Arbitration Act, 1940. The controlling consideration was that a judgment according to the award must speak from the date of the decree, and the decree must be capable of execution for a definite rupee sum. Accordingly, where an award is made in foreign currency and the court pronounces judgment according to that award, the foreign currency amount must be converted at the rate prevailing on the date of the decree, or the nearest preceding date proved before the court. Any option to pay in foreign currency remains subject to the requirements of foreign exchange law.

Conclusion: The proper date of conversion is the date of the decree.

Issue (iv): Whether the respondent was entitled to interest on the amounts claimed in rupees.

Analysis: The award itself allowed interest only on amounts payable in French francs. It specifically excluded interest where the amount due was in rupees until the date of the award. The sums on which interest was claimed were rupee amounts, so the claim fell outside the award.

Conclusion: The claim for interest was rejected.

Final Conclusion: The appeal by the foreign party succeeded and the cross-appeal by the statutory commission failed. The order of the Division Bench was set aside, the execution order of the Single Judge was restored with a modification that payment in French francs would be subject to the requisite foreign exchange permission, and the respondent's separate claims were disallowed.

Ratio Decidendi: In Indian proceedings on a money decree or arbitral award expressed in foreign currency, the foreign currency sum is to be converted into Indian rupees at the rate prevailing on the date of the decree, and a court decree in terms of the award must be capable of execution for a definite rupee equivalent, subject to foreign exchange law.

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