ICC arbitration challenge finality and breach-damages award survived objections under contractual and regulatory framework.

Parties who adopt ICC Rules are bound by the institutional timetable for challenging an arbitrator and by the ICC Court's final decision on appointment, confirmation, challenge, or replacement; a delayed challenge is barred by waiver and estoppel, and the tribunal's constitution is not vitiated merely because reasons are not disclosed. The award was also treated as one for damages for breach of contract, not enforcement of a put option, so objections based on FEMA and RBI put-option restrictions did not apply. The tribunal was not found to have rewritten the contract, and the award of interest and costs was consistent with the agreement and the parties' litigation conduct.

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Issues: (i) whether the challenge to the constitution of the arbitral tribunal and the rejection of the challenge by the ICC Court vitiated the award; (ii) whether the majority arbitral award suffered from legal infirmity on merits, including the nature of the respondents' claim and the alleged violation of the contractual and regulatory framework.

Issue (i): whether the challenge to the constitution of the arbitral tribunal and the rejection of the challenge by the ICC Court vitiated the award.

Analysis: The parties had incorporated the ICC Rules into their arbitration agreement and were therefore bound by the time-limit for challenging an arbitrator as well as by the rule that the ICC Court's decision on appointment, confirmation, challenge, or replacement of an arbitrator would be final and need not disclose reasons. The petitioners' challenge to the respondent-nominated arbitrator was raised beyond the prescribed period. Further, the petitioners had themselves nominated an arbitrator whose qualifications were not materially different and had proceeded without timely objection, attracting waiver and estoppel. The rejection of the challenge by the ICC Court was, therefore, binding and could not be reopened merely because reasons were not supplied.

Conclusion: The challenge to the tribunal failed and did not invalidate the award.

Issue (ii): whether the majority arbitral award suffered from legal infirmity on merits, including the nature of the respondents' claim and the alleged violation of the contractual and regulatory framework.

Analysis: The respondents' claim was treated as one for damages for breach of contract and not as an enforcement of the contractual put option. On the facts, the petitioners had received the investment amounts and failed to honour their contractual obligations. The attack based on FEMA and RBI circulars relating to put options was misplaced because the award did not proceed on enforcement of a put option. The court also found no basis to hold that the tribunal had rewritten the contract, and the award of interest and costs was consistent with the agreement and the prolonged litigation conduct.

Conclusion: The award disclosed no ground for interference under Section 34.

Final Conclusion: The arbitral award was upheld in full, and the petition was rejected with costs.

Ratio Decidendi: Where parties have agreed to arbitrate under institutional rules that make an arbitral institution's decision on challenge final, a belated challenge is barred by waiver and estoppel; and an award based on damages for breach of contract, rather than on exercise of a put option, is not invalidated by regulatory provisions governing put-option exits.

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