SC to solve cur­rency poser

Business Standard - - BUSINESS LAW -

The Delhi High Court has left it to the Supreme Court to solve a fre­quent dis­pute aris­ing on the con­ver­sion rate of cur­rency in an agree­ment. In this case, a sin­gle judge Bench had held that "for the pur­poses of con­ver­sion of US dol­lars to In­dian ru­pees, the ex­change rate as preva­lent on the date of the agree­ment dated (29.06.1982) would be ap­pli­ca­ble". Two com­pa­nies, Royal Con­struc­tion Co and Na­tional Projects Con­struc­tion Corp had un­der­taken a project in Iraq, whose value was of the or­der of Iraqi Di­nars 7,83,834 con­verted into US dol­lars at the agreed rate of ex­change of ID 1 = USD 3.37778. Dis­putes arose be­cause of de­lay in the project due to the Iran-Iraq war and the mat­ter was re­ferred to ar­bi­tra­tion and the award came after two decades. The is­sue which arose now was whether the con­ver­sion rate should be that pre­vail­ing at the time of the agree­ment or at the time of the award. The dis­pute was taken to the Supreme Court. How­ever, the mat­ter came back to the high court in view of pur­ported am­bi­gu­ity in the Supreme Court or­der. The high court, there­fore, di­rected the par­ties to ap­proach the apex court for a de­fin­i­tive or­der.

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