In Brief

This appeal concerns a dispute between an oil drilling contractor and an operator regarding a "change in law" clause in a fixed-rate contract. The contractor sought reimbursement for increased High-Speed Diesel (HSD) prices, claiming Clause 23 of the contract entitled it to compensation. The arbitral tribunal allowed the claim through liberal interpretation. The High Court set aside the award, holding the interpretation was erroneous and against public policy. The Supreme Court upheld the High Court, finding that the tribunal's interpretation was not reasonably possible when the entire contract was read harmoniously, particularly given explicit force majeure and fixed-rate provisions. The judgment reaffirms that arbitral awards may be set aside when an interpretation is not even a plausible one.

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