MMTC Ltd. Vs Anglo American Metallurgical Coal Pvt. Ltd. (Supreme Court of India)
Fraud on Self No Ground to Resist Execution – SC Upholds ₹1,087 Cr Arbitral Award Against MMTC
The Supreme Court dismissed MMTC’s objections under Section 47 CPC, thereby upholding enforcement of an arbitral award of about ₹1,087 crore in favour of Anglo.
MMTC contended that its senior officials had colluded with Anglo in fixing an abnormally high coal price of US$ 300 per metric tonne for the 5th delivery period under a 2007 Long Term Agreement, despite the prevailing market rate being around US$ 96, & alleged that such fraud was discovered only after the Supreme Court had already upheld the award in 2020. The Company sought to stall execution pending a CBI inquiry.
The Court, however, held that objections under Section 47 can lie only within a very narrow compass—namely, when a decree is a nullity due to jurisdictional defects or fraud on the tribunal itself, not when fraud is alleged internally within a corporation. Since the price fixation followed the Government’s Empowered Joint Committee rate applicable to SAIL & RINL & was a matter of commercial discretion, the Court applied the business judgment rule, holding that bona fide business decisions cannot be second-guessed with hindsight.
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