In Brief
Hyundai Corporation contracted with ONGC to provide platform facilities for offshore oil drilling. After submitting tenders in early 1983, the Income Tax Act was extended to the Exclusive Economic Zone, and Section 44BB (taxing services related to mineral oil extraction) was introduced with retrospective effect from 1 April 1983. This triggered a dispute over whether ONGC must reimburse taxes paid by Hyundai's sub-contractor under a contractual change-of-law clause. Two Arbitrators agreed Section 44BB constituted a change in law; the Umpire disagreed. The Supreme Court held the Umpire's award vitiated because it decided a matter already resolved in Hyundai's favour. The case was remitted to a new Umpire to decide only whether another contract clause would prevent reimbursement.
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