Bombay High Court Says Award-Holder Has No Right to Retain Deposit After Arbitral Award Is Set Aside

The Bombay High Court recently held that Rashtriya Chemicals and Fertilizers Limited has no right to retain Rs 218.45 crore deposited by Thermax after the arbitral award in its favour was set aside, making it clear that the pendency of an appeal cannot be used to hold on to the money.

A Division Bench of Chief Justice Shree Chandrashekhar and Gautam A. Ankhad said the legal position was straightforward once the award no longer existed.

The court noted, “There is no arbitral award in existence, and, therefore, there is no question of the respondent suffering rigors of the arbitral award.”

The bench added that this consequence flowed directly from the award having been set aside. The case stems from an arbitral award dated June 5, 2023, passed in favour of Rashtriya Chemicals and Fertilizers Limited.

While the challenge to the award was pending, Thermax deposited Rs 218.45 crore in court under an interim order passed on October 4, 2023.

In December 2025, a single judge of the High Court set aside the arbitral award.

After that decision, RCF filed an appeal and sought a stay of the single judge's order. It also asked the court to allow it to retain the deposited amount until the appeal was finally decided.

RCF argued that its appeal had strong merits and that the money should remain with the court as a condition for granting a stay. It pointed out that it is a government-owned company with sufficient financial strength to repay Thermax if the appeal failed.

Thermax opposed the plea, saying that once the award was set aside, RCF could not claim any entitlement over the deposit.

Thermax said the earlier interim order clearly required the amount to be returned with interest and that the mere filing of an appeal was no reason to hold back money when the award itself no longer stood.

The Bench agreed. It held that after the December 2025 judgment set aside the award, it had no legal force, leaving RCF with no entitlement to the money deposited in court.

The court noted that the deposit was made only because the award and the interim order were in place. Once the award was struck down, Thermax could not be made to suffer the consequences of an award that no longer existed.

On this basis, the court dismissed RCF's interim application and directed that the appeal be taken up for final hearing on March 23, 2026.

For RCF: Senior Counsel Shyam Mehta with Advocates Aditya Bapat, Sheroy M. Bodhanwalla, Sayali Puri, Akash Singh, and Shreyas Thakur, instructed by M.S. Bodhanwala & Co.

For Thermax: Senior Counsels Janak Dwarkadas and Mustafa Doctor with Advocates Aditya Thakkar, R. Sudhinder, Ranjit Shetty, Rahul Dev, Monika Vyas instructed by Argus Partners