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“246. I accept Mr Mayal's unchallenged evidence that the value of Haldia's equity was likely negligible as at July 2017 and thereafter. I am satisfied that the market value of Haldia's shares from July 2017 onwards was zero.”

35. By reckoning the market value of the Company's shares as zero, as on the date of breach, the Arbitral Tribunal concluded, at paragraphs 247 and 258 of the Foreign Award, that the loss caused due to the breach was the total unpaid consideration of INR 195 crore. This amount was directed to be paid in the following manner to the three petitioners: INR 1,00,19,78,640 to https://www.mhc.tn.gov.in/judis  Arb.O.P(Com.Div)No.88 of 2022 petitioner No.1; INR 68,96,48,700 to petitioner No.2; and INR 25,83,72,660 to petitioner No.3. The conclusion with regard to market value of the shares of the Company, as on date of breach, was drawn on appraisal of evidence and cannot be said to be contrary to the fundamental policy of Indian law.

39. The Arbitral Tribunal awarded aggregate damages of INR 195 crore plus interest for breach of contracts to purchase shares that were subscribed to by the petitioners for the aggregate consideration of about INR 125 crore. In effect, the entire unpaid consideration under the SPAs was directed to be paid as damages. As discussed earlier, the sum of INR 195 crore was arrived at by the Arbitral Tribunal, as representing reasonable compensation, by accepting evidence that the market value of the shares was zero on the date of breach. Especially in that factual context, if obligations under the SPAs had been fulfilled, the respective parties to the SPA could not have paid or received INR 200 crore, in the aggregate, as consideration for these shares without RBI approval. Indeed, as discussed earlier, the Arbitral Tribunal was alive to the requirement of RBI approval but concluded that the absence of such approval is rectifiable by obtaining approval and does not result in the SSHAs or SPAs being rendered void.

41. Given that FEMA is a statute aimed at regulating foreign exchange, in my view, the receipt of damages equivalent to the entire unpaid sale consideration of INR 195 crore pursuant to the Foreign Award for breach of contracts to buy shares at an aggregate sum of INR 200 crore, when the https://www.mhc.tn.gov.in/judis  Arb.O.P(Com.Div)No.88 of 2022 market value of the shares at the time of breach was zero, requires the prior approval of RBI. While undertaking this exercise, the RBI will do well to bear in mind that an Indian company received investments by representing and warranting that the agreements are valid and enforceable under Indian law and thereafter reneged on contractual obligations. This resulted in the award of damages by the Arbitral Tribunal. Some relevant considerations would be: if the amount received as damages is not repatriated and is instead deployed in India, there may not be an impact from a foreign exchange outflow perspective; whereas, if the money is to be repatriated out of India, the implications from a foreign exchange perspective change significantly. These and other material aspects may be taken into consideration by the RBI upon receipt of an appropriate application. To that extent, in this context, I disagree with the conclusion in NTT Docomo.