In MMTC Ltd. v. PAMP Holding Mauritius Ltd. & Anr. (O.M.P. (COMM) 188/2017, decided 3 November 2026), Justice Om Prakash Shukla of the High Court of Delhi partly allowed a Section 34 challenge to a 2016 arbitral award arising out of a gold-refinery joint venture. Because one party was incorporated in Mauritius, the arbitration was an international commercial arbitration and the patent-illegality ground was unavailable. The award nonetheless fell — to the extent it dismissed the petitioner’s surviving claims and awarded costs — because the tribunal never adjudicated the good-faith issue that the court held was a condition precedent to its central finding.
The case in one view
| Case | MMTC Ltd. v. PAMP Holding Mauritius Ltd. & Anr., O.M.P. (COMM) 188/2017 |
|---|---|
| Court | High Court of Delhi, Om Prakash Shukla J |
| Decided | 3 November 2026 (reserved 7 September 2026) |
| Provision | Section 34, Arbitration and Conciliation Act, 1996 |
| Award | Dated 11 December 2016; all claims dismissed, with costs against the petitioner |
| Outcome | Petition partly allowed; award set aside to the extent of the dismissal of surviving claims and the costs direction |
The joint venture and the dispute
The underlying relationship was a 2008 share purchase and shareholders agreement under which a public sector trading company held 26% and its foreign partner the majority stake in an Indian joint venture operating a gold and silver refinery. The petitioner’s case before the tribunal was that the majority shareholder used its control to route payments of roughly Rs 71 crore from the joint venture to its own affiliates under a sourcing agreement and a know-how licence, for services the petitioner said the partner was obliged to provide without separate charge, in breach of the agreement’s good-faith clause. The tribunal dismissed all claims in December 2016, finding the agreement did not require free services and that the affiliate transactions were at arm’s length, and awarded substantial costs. The Section 34 petition spent the better part of a decade on the court’s board before judgment.
The narrowed battlefield
The decisive gap in the award
What remained was the public-policy and natural-justice family of grounds, and here the challenge found its mark. The court reasoned that compliance with the agreement’s good-faith obligation was a mandatory condition precedent to any adjudication of whether the affiliate transactions were at arm’s length. Yet the award, examined as a whole, showed the good-faith defence was left completely unadjudicated. Drawing on recent Division Bench authority of the same court, the judgment treats a complete failure to decide a material issue — as distinct from deciding it badly or briefly — as falling within Sections 34(2)(a)(iii)/(iv) and 34(2)(b)(ii), where it results in actual prejudice. The omission here, the court found, directly vitiated the tribunal’s final decision.
From the judgment: “an arbitral award cannot be set aside simply because the arbitrator has committed an error of law” — the interference rested not on error, but on the issue never having been decided at all.
The relief — carefully tailored
The operative order is an exercise in surgical restraint. The award was set aside to the extent that it dismissed the surviving claims and, consequentially, directed the petitioner to pay costs premised on that dismissal. Findings on prayers the petitioner had abandoned before the tribunal were left intact, and the parties were expressly left free to pursue contractual or other legal remedies for the surviving dispute. The judgment thus avoids both extremes: it neither rewrites the award nor lets a half-decided one stand.
Lessons for arbitration users
Frequently Asked Questions
Why was patent illegality not available?
Section 34(2A) makes patent illegality a ground only for purely domestic awards. Since one respondent was a company incorporated in Mauritius, the arbitration qualified as an international commercial arbitration even though it was seated in India, leaving the challenger confined to the grounds in Section 34(2) — among them the inability to present one's case, the award travelling beyond the tribunal's remit, and conflict with the public policy of India.
What exactly had the tribunal failed to decide?
The parties' shareholders agreement contained a good-faith obligation. The court held that compliance with that obligation was a mandatory condition precedent to the tribunal's conclusion that the affiliate transactions were at arm's length — yet the award, read as a whole, left the good-faith question entirely unadjudicated. The court classed this as a complete absence of intelligible reasoning on a material issue, not a case of merely inadequate reasons.
Was the whole award set aside?
No. The award was set aside only to the extent it dismissed the petitioner's surviving claims for breach of the agreement and the related monetary relief, together with the consequential costs direction. Portions concerning prayers the petitioner had not pursued before the tribunal were left undisturbed, and the parties were left free to pursue remedies available in law for the surviving dispute.
What is the standard for interference on public policy?
A high one. The judgment reiterates that an award cannot be set aside merely for an error of law and that the injustice must be fundamental enough to shock the conscience of the court. A tribunal's complete failure to decide a pivotal issue, causing actual prejudice, is one of the narrow situations that crosses the line.