HYUNDAI CORPORATION vs OIL AND NATURAL GAS CORP. LTD.

The Supreme Court addressed the applicability of Clause 17.3 of the contract in light of the introduction of Section 44BB of the Income Tax Act, 1961, which imposed tax liabilities on non-resident contractors engaged in oil exploration. The Court held that the change in law, specifically the retrospective effect of Section 44BB, entitled the appellant to indemnification for increased costs incurred due to the new tax obligations. The ruling clarified that the indemnity clause was triggered by legislative changes affecting the contractor's financial responsibilities, thus upholding the appellant's claim for relief under the contract.