Arbitration and Conciliation Act, 1996 – s.48 – Chapter 1 Part II – Foreign Award – According to the appellants-Award Debtors , the Presiding Arbitrator, CL, one of the threemember Arbitral Tribunal, had failed to make a full and frank disclosure of material facts and circumstances concerning conflict of interest and therefore the Award rendered by the Tribunal presided by CL cannot be enforced as it is against public policy in terms of s.48(2) (b)of the Indian Arbitration Act – Propriety:

[2024] 3 S.C.R. 971 : 2024 INSC 242

Avitel Post Studioz Limited & Ors.

v.

HSBC PI Holdings (Mauritius) Limited

(Previously Named Hpeif Holdings 1 Limited)

(Civil Appeal Nos. 3835 – 3836 of 2024)

04 March 2024

[Hrishikesh Roy and Prashant Kumar Mishra, JJ.]

Issue for Consideration

The High Court facilitated the enforcement of the final Award dated

27.09.2014 issued at Singapore International Arbitration Centre

(SIAC). The appellants’ objection to enforcement of the foreign

Award, in terms of s.48 of the Arbitration and Conciliation Act, 1996

was rejected and the High Court had also directed that the order of

attachment against the Award Debtors-appellants shall continue to

operate during the execution proceedings to be undertaken by the

respondent-Award Holder. Whether the High Court was correct in

its decision to reject the objection u/s. 48(2)(b) of Indian Arbitration

Act against enforcement of the foreign Award on the grounds of

arbitral bias and violation of public policy. Further, whether the

ground of bias could be raised at the enforcement stage u/s. 48(2)

(b) for being violative of the “public policy of India” and the “most

basic notions of morality or justice”.

Headnotes

Arbitration and Conciliation Act, 1996 – s.48 – Chapter 1

Part II – Foreign Award – According to the appellants-Award

Debtors , the Presiding Arbitrator, CL, one of the threemember Arbitral Tribunal, had failed to make a full and frank

disclosure of material facts and circumstances concerning

conflict of interest and therefore the Award rendered by the

Tribunal presided by CL cannot be enforced as it is against

public policy in terms of s.48(2) (b)of the Indian Arbitration

Act – Propriety:

Held: The Award in the instant matter was passed in Singapore,

a New York Convention Country and notified as a reciprocating

territory by India – Chapter 1 Part II of the Indian Arbitration Act

is applicable in the present case – The parties had expressly

chosen Singapore as the seat of Arbitration – It is the seat court 

972 [2024] 3 S.C.R.

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which has exclusive supervisory jurisdiction to determine claims

for a remedy relating to the existence or scope of arbitrator’s

jurisdiction or the allegation of bias – A contrary approach would

go against the scheme of the New York Convention which has

been incorporated in India – The jurisdiction was therefore chosen

based on the perceived neutrality by the parties aligning with the

principle of party autonomy – In the instant case, no setting aside

challenge based on bias was raised before the Singapore Courts

by the appellants within the limitation period – None of the grounds,

which are now being pressed, were raised during the arbitration

or in the time period available to the appellants to apply, to set

aside the Award in Singapore – Bonafide challenges to arbitral

appointments have to be made in a timely fashion and should

not be used strategically to delay the enforcement process – In

other words, the Award Debtors should have applied for setting

aside of the Award before the Singapore Courts at the earliest

point of time – As far as allegations of bias against Presiding

Arbitrator CL is concerned, the High Court after adverting to the

IBA guidelines concluded that there was no identity or conflict of

interest between CL and the award holder, or any of its affiliates

including its holding company – In assessment of this Court, the

High Court correctly suggested that CL neither had a duty to

disclose nor did he fail to discharge his legal duty of disclosure

in accepting the assignment as the Presiding Arbitrator – In the

circumstances here, it cannot be inferred that there was a bias

or likelihood of bias of the Presiding Arbitrator – Award Debtors

therefore cannot claim that there is any violation of the public

policy, which would render the foreign award unenforceable in

India – The award debtors have failed to meet the high threshold

for refusal of enforcement of a foreign award u/s. 48 of the Indian

Arbitration Act – Accordingly, the decision given by the High Court

for enforcement/execution of the foreign award stands approved.

[Paras 27, 28, 29, 35.1, 36, 43]

Arbitration – Foreign Award – Bias – Standard of public policy

in India:

Held: Embracing international standards in arbitration would foster

trust, certainty, and effectiveness in the resolution of disputes on

a global scale – In India, an internationally recognized narrow

standard of public policy must be adopted, when dealing with the

aspect of bias – It is only when the most basic notions of morality 

[2024] 3 S.C.R. 973

Avitel Post Studioz Limited & Ors. v. HSBC PI Holdings (Mauritius)

Limited (Previously Named Hpeif Holdings 1 Limited)

or justice are violated that this ground can be attracted – The

Supreme Court in Ssangyong Engineering & Construction Co. Ltd.

v. National Highways Authority of India (NHAI) had noted that the

ground of most basic notions of morality or justice can only be

invoked when the conscience of the Court is shocked by infraction

of fundamental notions or principles of justice – There can be no

difficulty in holding that the most basic notions of morality and

justice under the concept of ‘public policy’ would include bias –

However, Courts must endeavor to adopt international best practices

instead of domestic standards, while determining bias – It is only

in exceptional circumstances that enforcement should be refused

on the ground of bias. [Paras 25 and 26]

Arbitration – Foreign Award – Bias – Challenge at enforcement

stage:

Held: If the ground of arbitral bias is raised at the enforcement

stage, it must be discouraged by the Courts to send out a clear

message to the stakeholders that Indian Courts would ensure

enforcement of a foreign Award unless it is demonstrable that there

is a clear violation of morality and justice – The determination of

bias should only be done by applying international standards –

Refusal of enforcement of foreign award should only be in a rare

case where, non-adherence to International Standards is clearly

demonstrable. [Para 42]

Case Law Cited

In Re: Interplay Between Arbitration Agreements under

the Arbitration and Conciliation Act,1996 and the Indian

Stamp Act,1899 [2023] 15 SCR 1081 : 2023 INSC

1066 – followed.

Ssangyong Engineering & Construction Co. Ltd. v.

National Highways Authority of India (NHAI) [2019] 7

SCR 522 : (2019) 15 SCC 131 – relied on.

Avitel Post Studioz v HSBC PI Holdings [2020] 10 SCR

91 : (2021) 4 SCC 713; NN Global Mercantile Private

Ltd. v. M/s Indo Unique Flame Ltd. [2023] 9 SCR 285 :

(2023) 7 SCC 1; Renusagar Power Co. Ltd. v. General

Electric Co. [1993] Suppl. 3 SCR 22 : (1994) Supp (1)

SCC 644; Union of India v. Vedanta [2020] 12 SCR

1 : (2020) 10 SCC 1; Shri Lal Mahal Ltd. v. Progetto 

974 [2024] 3 S.C.R.

Digital Supreme Court Reports

Grano SpA [2013] 13 SCR 599 : (2014) 2 SCC 433;

Vijay Karia v. Prysmian Cavi E. Sistemi SRL [2020] 4

SCR 336 : (2020) 11 SCC 1 – referred to.

Perma Container(UK) Line Limited v. Perma Container

Line(India) Ltd. 2014 SCC OnLine Bom 575 – referred

to.

J. Burrough, Richardson v. Mellish (1824) 2 Bing. 229

at 252; Enderby Town Football Club Ltd. v. The Football

Association Ltd. [1971] Ch 591; Parsons & Whittemore

Overseas Co. v. Societe Generale de L’Industrie du

Papier 508 F.2d 969 (1974); Halliburton Co. v Chhub

Bermuda Insurance Ltd. [2020] UKSC 48; Hancock

v Hancock Prospecting Pty Ltd. [2022] NSWSC 724;

Dutch Shipowner v. German Cattle and Meat Dealer,

Bundesgerichtshof, Germany 1 February 2001, XXIX

Y.B.Com. Arb. 700 (2004) – referred to.

Books and Periodicals Cited

Travaux Préparatoires, Convention on the Recognition

and Enforcement of Foreign Arbitral Awards (New York,

1958) Commission on International Trade Law (United

Nations); Nigel Blackaby KC, and others, Redfern

and Hunter on International Arbitration (7th Edn,

OUP 2022), 594; Article 1514 of French Code of Civil

Procedure 1981; Gary Born, International Commercial

Arbitration(3rd ed,2021) 2838; Robert Briner, Philosophy

and Objectives of the Convention’ in Enforcing

Arbitration Awards under the New York Convention.

Experience and Prospects (United Nations 1999);

George A Bermann, ‘Recognition and Enforcement

of Foreign Arbitral Awards: The Interpretation and

Application of the New York Convention by National

Courts’ in George A. Bermann(ed) Recognition and

Enforcement of Foreign Arbitral Awards (Springer 2018)

60; Committee On International Commercial Arbitration,

‘Application Of Public Policy As A Ground For Refusing

Recognition Or Enforcement Of International Arbitral

Awards’ In International Law Association Report Of

The Seventieth Conference(New Delhi 2000); Fali

Nariman and others, ‘The India Resolutions for the

1958 Convention on the Recognition and Enforcement

of Foreign Awards’ in Dushyant Dave and others(ed) 

[2024] 3 S.C.R. 975

Avitel Post Studioz Limited & Ors. v. HSBC PI Holdings (Mauritius)

Limited (Previously Named Hpeif Holdings 1 Limited)

Arbitration in India (Kluwer 2021); Reinmar Wolff (ed),

A Review of New York Convention: Article-by-Article

Commentary (2nd edn Beck/Hart, 2019) 352; Stavroula

Angoura, ‘Arbitrator’s Impartiality Under Article V(1)(d)

of the New York Convention’ (2019) 15 (1) AIAJ 29;

Gary Born(n 12)3937; William W. Park, ‘Arbitrator Bias’

(2015) TDM 12; Sumeet Kachwaha, ‘The Rule Against

Bias and the Jurisprudence of Arbitrator’s Independence

and Impartiality’(2021) 17(2) AIAJ 104; Vibhu Bakhru J,

‘Impartiality and Independence of the Arbitral Tribunal’ in

Shashank Garg(ed),Arbitrator’s Handbook (Lexis Nexis

2022); Gary Born (n 12) 3946; AV Dicey and L. Collins,

Dicey, Morris & Collins on the Conflict of laws(15th edn,

Sweet and Maxwell 2018) [16-36]; Oscar Wilde, Act III,

Lady Windermere’s Fan, 1893 – referred to.

List of Acts

Arbitration and Conciliation Act, 1996.

List of Keywords

Arbitration; Foreign award; Seat of Arbitration; Exclusive

supervisory jurisdiction; Existence or scope of arbitrator’s

jurisdiction; Bias; Allegation of bias; New York Convention; Arbitral

appointments; Bonafide challenges to arbitral appointments;

Conflict of interest; Legal duty of disclosure; Enforcement of foreign

award; Enforcement process; Violation of the public policy; Basic

notions of morality or justice; Principles of justice; International

best practices; Domestic Standard; Refusal of enforcement of

foreign award.

Case Arising From

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 3835-3836

of 2024

From the Judgment and Order dated 25.04.2023 of the High Court

of Judicature at Bombay in AP No.833 of 2015 and NOM No.2475

of 2016

Appearances for Parties

Mukul Rohatgi, Vikram Nankani, Sr. Advs., Shridhar Y. Chitale, Sumeet

Nankani, Karan Bharihoke, Ms. Manali Singhal, Ankur Yadav, Advs.

for the Appellant.

976 [2024] 3 S.C.R.

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Neeraj Kishan Kaul, Darius Khambata, Nikhil Sakhardande, Sr. Advs.,

Rajendra Barot, Ms. Priyanka Shetty, Ms. Sherna Doongaji, Ayush

Chaddha, Dhaval Vora, Shanay Shroff, Dhruv Sharma, Raghav

Agarwal, Ms. Sonali Jain, Advs. for the Respondent.

Judgment / Order of the Supreme Court

Order

1. Delay condoned.

2. Leave granted.

3. Heard Mr. Mukul Rohatgi and Mr. Vikram Nankani, learned senior

counsel appearing for the appellants (Award Debtors). Also heard

Mr. Neeraj Kishan Kaul and Mr. Darius Khambata, learned senior

counsel appearing for the respondent (Award Holder).

4. The challenge in these appeals is to the order dated 25.04.2023 in

the Arbitration Petition No. 833 of 2015 and Notice of Motion No. 2475

of 2016 respectively whereunder, the High Court has facilitated the

enforcement of the final Award dated 27.09.2014 issued in the SIAC

Arbitration No. 088 of 2012. The appellants’ objection to enforcement

of the foreign Award, in terms of Section 48 of the Arbitration and

Conciliation Act, 1996 (for short “Indian Arbitration Act”)was rejected

and the High Court also directed that the order of attachment against

the Award Debtors shall continue to operate during the execution

proceedings to be undertaken by the respondent. Accordingly, the

Award Debtors were called upon to place on record disclosure

affidavits as regards their properties.

Facts

5. This case has a chequered history and it is essential to note the

background facts for the present challenge.

5.1. The respondent-HSBC PI Holdings (Mauritius) Limited (for

short “HSBC”) is a company incorporated under the laws of

Mauritius. The appellant No. 1 Avitel Post Studioz Limited (for

short “Avitel India”) is a company incorporated under the laws

of India and it is the parent company of Avitel Group. It holds

entire issued capital of Avitel Holdings Limited, which in turn,

holds entire issued share capital of Avitel Post Studioz FZ LLC.

Appellant No. 2 is the founder of Avitel Post Studioz Limited, 

[2024] 3 S.C.R. 977

Avitel Post Studioz Limited & Ors. v. HSBC PI Holdings (Mauritius)

Limited (Previously Named Hpeif Holdings 1 Limited)

being its Chairman and Director, while Appellant Nos. 3 and 4

are his sons, who are directors of Appellant No. 1.

5.2. On 21.4.2011, a Share Subscription Agreement was entered

between HSBC & Avitel India whereby HSBC made an

investment in the equity capital of Avitel India for a consideration

of US 60 million dollars to acquire 7.8% of its paid-up capital. This

agreement contained an arbitration clause which provided that the

disputes shall be finally resolved at the Singapore International

Arbitration Centre (SIAC). Singapore was designated as the

seat of arbitration and Part I of the Indian Arbitration Act was

excluded, except Section 9 thereof. Thereafter, the parties

also entered into a Shareholders’ Agreement(6.5.2011) which

defined the relationship between the parties and contained an

identical arbitration clause.

5.3. It is the case of HSBC(Award Holder) that the appellants at a

very advanced stage made certain representations to HSBC

stating that the investment of US$ 60 Million was required

to service a significant contract with the British Broadcasting

Corporation (BBC).

5.4. Following the investment, according to HSBC, the appellants

ceased to provide any information regarding the contract with

BBC, despite numerous follow-up attempts. At this stage,

HSBC engaged their independent investigation agency, where

it was discovered that the purported BBC Contract was nonexistent and the invested amount was siphoned off to different

Companies.

5.5. On 11.05.2012, HSBC invoked the arbitration clause under the

SIAC Rules and claimed damages of US$ 60 million from the

appellants. On 14.5.2012, SIAC Appointed Mr. Thio Shen Yi,

SC as an Emergency Arbitrator. On 17.5.2012, the appellants’

challenge to the appointment of the Emergency Arbitrator was

considered by SIAC & Rejected. On 28.05.2012 and 29.5.2012,

the emergency arbitrator passed two interim Awards, in favour of

HSBC inter alia, directing the appellants to refrain from disposing

of/diminishing the value of their assets upto US$ 50 million. On

27.7.2012, the Emergency Arbitrator made an amendment to

Interim Awards granting further relief to HSBC by rejecting to

desist investigations against Avitel Dubai and Avitel Mauritius.

978 [2024] 3 S.C.R.

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5.6. According to HSBC, the appellants made several attempts

to delay and frustrate the proceedings. The arbitral tribunal

consisted of three members. Mr. Christopher Lau, SC, was

the Chairman, while Justice F.I. Rebello (retired) and Dr.

Michael Pryles were members of the arbitral tribunal. On

27.09.2014, the tribunal rendered its final award and directed

the appellants to pay US$ 60 million as damages for fraudulent

misrepresentations.

5.7. The respondent had initiated proceedings under Section 9 of

the Indian Arbitration Act before the Bombay High Court. A

direction was issued to the appellants to deposit US$ 60 million

for the purpose of enforcement of the Award. Aggrieved by

the same, the appellants filed a Special Leave Petition before

this Court where it was contended, inter alia, that the dispute

is non-arbitrable under Indian law as it involved allegations

of fraud which included serious criminal offenses such as

forgery and impersonation. Settling the law on the arbitrability

of fraud, this Court in the earlier round in Avitel Post Studioz

v HSBC PI Holdings1

, held that the dispute was arbitrable and

that HSBC had a strong prima facie case in the enforcement

proceedings, in the context of Section 9 proceedings in which

HSBC had sought maintenance of the entire claim amount in

Avitel’s bank account.

5.8. Since the appellants failed to abide by the direction given by

this Court to deposit the amount, a contempt proceeding was

initiated against them. On 11.07.2022, this Court found that Avitel

had deliberately and willfully disobeyed its order and hence, the

appellants were directed to remain present before this Court.

The Appellant Nos.2 to 4 however went abroad defying the

direction given by this Court, as a result of which, warrants and

look-out notices were also issued, with a further direction to the

Ministry of External Affairs and Central Bureau of Investigation

for issuance of Red-Corner Notice. Ultimately, appellant Nos.2 to

4 surrendered and despite tendering an unconditional apology,

this Court refused to accept the same and for their conduct,

appellant Nos. 2 to 4 were sentenced to imprisonment.

1 [2020] 10 SCR 791 : (2021) 4 SCC 713

[2024] 3 S.C.R. 979

Avitel Post Studioz Limited & Ors. v. HSBC PI Holdings (Mauritius)

Limited (Previously Named Hpeif Holdings 1 Limited)

Submissions

6. According to the appellants, the Presiding Arbitrator, Mr. Christopher

Lau of the three-member Arbitral Tribunal, had failed to make a full

and frank disclosure of material facts and circumstances concerning

conflict of interest and therefore the Award rendered by the Tribunal

presided by Mr. Lau cannot be enforced as it is against public policy

in terms of Section 48(2)(b)of the Indian Arbitration Act.

7. The counsel for the appellants refers to the IBA Guidelines on Conflict

of Interest in International Arbitration, 2004 (“IBA Guidelines”) along

with the Red, Orange and Green lists appended thereto covering

matters concerning disclosure and conflict of interest to argue that

the High Court ought to have refused enforcement of the Award. The

specific contention is that the Presiding Arbitrator failed to disclose

his conflict of interest to adjudicate the dispute. According to the

Award Debtors the independence and impartiality of the Presiding

Arbitrator was compromised, as per General Standard 3 of the IBA

Guidelines.

8. On the other hand, learned counsel for the respondent (Award

Holder) would submit that the concerned party here is HSBC PI

Holdings (Mauritius) Limited, which is a subsidiary of HSBC Holdings

PLC (United Kingdom). The other subsidiary is HSBC (Singapore)

Nominees Pte Ltd. which is alleged to have a contractual association

with Wing Tai. The HSBC (Singapore) held 6.29% of Wing Tai’s equity

capital on a trustee/nominee basis, as of 15.09.2014. But the said

Wing Tai has no relationship with the Award Holder and is not part

of the HSBC Group.

9. Insofar as the Presiding Arbitrator Mr. Christopher Lau is concerned,

the respondent submits that he has been an independent nonexecutive Director of Wing Tai since 28.10.2013 and also the

Chairman of the Audit and the Risk Committee of Wing Tai. But Mr.

Lau is not an employee of Wing Tai and therefore it is contended

that it is wrong to say that he cannot discharge responsibility as

an independent arbitrator or was incapacitated in any manner, in

rendering the final Award dated 27.09.2014.

10. Initially, the Award Holders argued before the High Court that bias

could not be raised under the concept of “public policy of India”.

However, later on, submissions were made to demonstrate that 

980 [2024] 3 S.C.R.

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even if it is accepted for the sake of argument that the issue could

be raised at the stage of enforcement, no disclosure was required

on the part of the arbitrator.

11. Before this Court, the appellants attempted to raise an additional

challenge to the award under Section 48(1)(b) of the Indian Arbitration

Act on account of ‘inability to present their case’.

12. Another ground mentioned in the SLP was to consider the effect

of the dictum of the five-judge bench of this Court in NN Global

Mercantile Private Ltd. v M/s Indo Unique Flame Ltd2

 (for short “NN

Global”) delivered on 25.04.2023 as per which the Share Subscription

Agreement being insufficiently stamped would be unenforceable in

India. However, during the pendency of the present proceedings, the

Supreme Court in In Re: Interplay Between Arbitration Agreements

under the Arbitration and Conciliation Act,1996 and the Indian Stamp

Act,18993

 delivered on 13.12.2023 has overruled the decision in NN

Global (supra). The 7-judge bench had noted, inter alia, that the

purpose of the Stamp Act,1899 is to protect the interests of revenue

and not arm litigants with a weapon of technicality by which they

delay the adjudication of the lis. This may be the reason why the

Counsel chose not to orally argue on this point.

13. The two grounds noted above, need not detain us as the fundamental

issue that requires determination is whether enforcement can be

refused on the ground of bias. In these proceedings, challenging

the High Court’s judgment, the appellants reiterate their contention

that the enforcement of the award is impermissible on the ground

of arbitral bias and is contrary to the “public policy of India” as per

Section 48(2)(b) of the Indian Arbitration Act.

Discussion

14. Against this background, the consideration to be made in these

matters is whether the High Court was correct in its decision to

reject the objection under Section 48(2)(b) of Indian Arbitration Act

against enforcement of the foreign Award on the grounds of arbitral

bias and violation of public policy. This raises a further question as

to whether the ground of bias could be raised at the enforcement

2 [2023] 9 SCR 285 : (2023) 7 SCC 1

3 [2023] 15 SCR 1081 : (2023) INSC 1066

[2024] 3 S.C.R. 981

Avitel Post Studioz Limited & Ors. v. HSBC PI Holdings (Mauritius)

Limited (Previously Named Hpeif Holdings 1 Limited)

stage under Section 48(2)(b) for being violative of the “public policy

of India” and the “most basic notions of morality or justice”?

15. India was one of the earliest signatories to the Convention on the

Recognition and Enforcement of Foreign Arbitral Awards, 1958 (for

short “New York Convention”)4

. The New York Convention superseded

the Geneva Convention of 1927 to facilitate the enforcement of

foreign Arbitral Awards5

. Article V(2) of the New York Convention

reads as under:

“2. Recognition and enforcement of an arbitral award may

also be refused if the competent authority in the country

where recognition and enforcement is sought finds that:

(a) The subject matter of the difference is not capable

of settlement by arbitration under the law of that

country; or

(b) The recognition or enforcement of the award would

be contrary to the public policy of that country.”

16. The precursors to the New York Convention on the contrary provided

for an expansive scope for invoking the public policy ground based

on the violation of the “fundamental principles of the law”. Although

the notion that ‘public policy’ is ‘a very unruly horse’ has gained

traction over the years6, one would also do well to remember

the words of Lord Denning who said that, “With a good man in

the saddle, the unruly horse can be kept in control.”7

 This would

suggest that a proper understanding of this branch of law by the

horse rider would be necessary. In that context, one of the earliest

cases that dealt with the aspect of “public policy” and the general

pro-enforcement bias of the New York Convention was the decision

in Parsons & Whittemore Overseas Co. v. Societe Generale de

L’Industrie du Papier,

8

 where the United States Court of Appeals,

Second Circuit noted:

4 Ratified on 13.7.1960

5 Travaux Préparatoires, Convention on the Recognition and Enforcement of Foreign Arbitral Awards

(New York, 1958) Commission on International Trade Law’ (United Nations)

6 J. Burrough, Richardson v. Mellish, (1824) 2 Bing. 229 at 252

7 Enderby Town Football Club Ltd. v. The Football Association Ltd., [1971] Ch 591

8 508 F.2d 969 (1974)

982 [2024] 3 S.C.R.

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“8. …The general pro-enforcement bias informing the

Convention and explaining its supersession of the Geneva

Convention points toward a narrow reading of the public

policy defense. An expansive construction of this defense

would vitiate the Convention’s basic effort to remove

preexisting obstacles to enforcement… Additionally,

considerations of reciprocity — considerations given

express recognition in the Convention itself— counsel

courts to invoke the public policy defense with caution

lest foreign courts frequently accept it as a defense to

enforcement of arbitral awards rendered in the United

States.

9. We conclude, therefore, that the Convention’s public

policy defense should be construed narrowly. Enforcement

of foreign arbitral awards may be denied on this basis only

where enforcement would violate the forum state’s most

basic notions of morality and justice.”

17. The above decision has been followed in various jurisdictions

including the Supreme Court of India in Renusagar Power Co. Ltd.

v. General Electric Co9

. The articulation of the “forum State’s most

basic notions of morality and justice” has been legislatively adopted

in the Indian Arbitration Act,1996. The legal framework concerning

enforcement of certain foreign awards in International Commercial

Arbitration is contained in Part II of the said Act. In this jurisdiction,

we must underscore that minimal judicial intervention to a foreign

award is the norm and interference can only be based on the

exhaustive grounds mentioned under Section 48.10 A review on the

merits of the dispute is impermissible11. This Court in Vijay Karia v.

Prysmian Cavi E. Sistemi SRL,

12 had noted that Section 50 of the

Indian Arbitration Act,1996 does not provide an appeal against a

foreign award enforced by a judgment of a learned Single Judge of

a High Court and therefore the Supreme Court should only entertain

the appeal with a view to settle the law. It was noted that the party

9 [1993] Suppl. 3 SCR 22 : 1994 Supp (1) SCC 644

10 Union of India v. Vedanta, [2020] 12 SCR 1 : (2020) 10 SCC 1

11 Shri Lal Mahal Ltd. v Progetto Grano SpA [2013] 13 SCR 599 : (2014) 2 SCC 433

12 [2020] 4 SCR 336 : (2020) 11 SCC 1

[2024] 3 S.C.R. 983

Avitel Post Studioz Limited & Ors. v. HSBC PI Holdings (Mauritius)

Limited (Previously Named Hpeif Holdings 1 Limited)

resisting enforcement can only have “one bite at the cherry” and when

it loses in the High Court, the limited scope for interference could

be merited only in exceptional cases of “blatant disregard of Section

48”. This principle of pro-enforcement bias was further entrenched

by the Supreme Court in Union of India v Vedanta13.

18. At this point, we may also note that Courts in some countries have

recognized that when applying their own public policy to Convention

Awards, they should give it an international and not a domestic

dimension14. The Arbitration legislation in France15, for instance,

makes an explicit distinction between national and international

public policy, limiting refusal of enforcement only to the latter ground.

Scholars have noted that the New York Convention’s structure and

objectives argue strongly against the notion that reliance should be

placed on local public policies without international limitations.16 The

objective behind such a distinction is to make it less difficult to allow

enforcement on public policy grounds. Most Courts have interpreted

the public policy exception extremely narrowly17.

19. The Indian Supreme Court in Renusagar (supra) had noted that

there is no workable definition of international public policy, and

“public policy” should thus be construed to be the “public policy of

India” by giving it a narrower meaning. Later on, in Shri Lal Mahal

Ltd. v Progetto Grano SpA18, the Supreme Court held that the wider

meaning given to ‘public policy of India’ in the domestic sphere under

Section 34(2)(b)(ii) would not apply where objection is raised to

the enforcement of the Award under Section 48(2)(b) of the Indian

Arbitration Act. This would indicate that the grounds for resisting

enforcement of a foreign award are much narrower than the grounds

available for challenging a domestic award under Section 34 of the

Indian Arbitration Act.

13 [2020] 12 SCR 1 : (2020) 10 SCC 1

14 Nigel Blackaby KC, and others, Redfern and Hunter on International Arbitration (7th Edn, OUP 2022),

594

15 Article 1514 of French Code of Civil Procedure 1981

16 Gary Born, International Commercial Arbitration(3rd ed,2021) 2838; Robert Briner, Philosophy and

Objectives of the Convention’ in Enforcing Arbitration Awards under the New York Convention.

Experience and Prospects (United Nations 1999).

17 George A Bermann, ‘Recognition and Enforcement of Foreign Arbitral Awards: The Interpretation and

Application of the New York Convention by National Courts’ in George A. Bermann(ed) Recognition and

Enforcement of Foreign Arbitral Awards (Springer 2018) 60

18 [2013] 13 SCR 599 : (2014) 2 SCC 433

984 [2024] 3 S.C.R.

Digital Supreme Court Reports

20. At this point, we may also benefit by noting that the International

Law Association issued recommendations19 at a conference held

in New Delhi in 2002 on international commercial arbitration and

advocated using only narrow and international standards, while

dealing with “public policy”. The recommendations have been

regarded as reflective of best international practices. The ILA also

defined international public policy as follows:

"(i) fundamental principles, pertaining to justice or

morality, that the State wishes to protect even when

it is not directly concerned;

(ii) rules designed to serve the essential political, social

or economic interests of the State, these being known

as ‘lois de police’ or ‘public policy rules’; and

(iii.) the duty of the State to respect its obligations towards

other States or international organizations.”

21. Being a signatory to the New York Convention, we must therefore

adopt an internationalist approach20. What follows from the above

is that there is a clear distinction between the standards of public

policy applicable for domestic arbitration and international commercial

arbitration. Proceeding with the aforedeclared proposition to have

a narrow meaning to the doctrine of public policy and applying an

international outlook, let us now hark back to whether a foreign Award

can be refused enforcement on the ground of bias.

22. Even though the New York Convention does not explicitly mention

“bias”, the possible grounds for refusing recognition of a foreign

award are contained in Article V(1)(d)(irregular composition of

arbitral tribunal), Article V(1)(b) (due process) and the public policy

defence under Article V(2)(b). Courts across the world have applied

a higher threshold of bias to prevent enforcement of an Award than

the standards set for ordinary judicial review21. Therefore, Arbitral

19 Committee On International Commercial Arbitration, ‘Application Of Public Policy As A Ground For

Refusing Recognition Or Enforcement Of International Arbitral Awards’ In International Law Association

Report Of The Seventieth Conference(New Delhi 2000)

20 Fali Nariman and others, ‘The India Resolutions for the 1958 Convention on the Recognition and

Enforcement of Foreign Awards’ in Dushyant Dave and others(ed) Arbitration in India (Kluwer 2021)

21 Reinmar Wolff (ed), A Review of New York Convention: Article-by-Article Commentary (2nd edn Beck/

Hart, 2019) 352

[2024] 3 S.C.R. 985

Avitel Post Studioz Limited & Ors. v. HSBC PI Holdings (Mauritius)

Limited (Previously Named Hpeif Holdings 1 Limited)

awards are seldom refused recognition and enforcement, considering

the existence of a heightened standard of proof for non – recognition

and enforcement of an award, based on alleged partiality22. It invokes

a higher threshold than is applicable in cases of removal of the

arbitrator.23 This is for the reasons that, greater risk, efforts, time,

and expenses are involved in the non-recognition of an award as

against the removal of an arbitrator during the arbitral proceedings.

23. What is also essential to note is that Courts across the world do

not adopt a uniform test while dealing with allegations of bias24. The

standards for determining bias vary across different legal systems

and jurisdictions25. English Courts26, for instance, adopt the “informed

or fair minded” observer test to conclude whether there is a “real

possibility of bias”. Australia27 adopts the “real danger of bias” test and

Singapore28 prefers the standard of “reasonable suspicion” rejecting

the “real danger of bias” test. Therefore, the outcome of a challenge

on the ground of bias would vary, depending on domestic standards.

24. Cautioning against applying domestic standards at the enforcement

stage, Gary Born29 emphasizing on the adherence to international

standards, makes the following observation:

“In light of developing sources of international standards

with regard to arbitrators’ conflict of interest, it should

be possible to identify and apply international minimum

standards of impartiality and independence...

More generally, in considering whether to deny recognition

of an award under Article V, national courts should not

apply domestic standards of independence and impartiality

without regard to their international context. Although

22 Stavroula Angoura, ‘Arbitrator’s Impartiality Under Article V(1)(d) of the New York Convention’ (2019) 15

(1) AIAJ 29

23 Gary Born(n 12)3937

24 William W. Park, ‘Arbitrator Bias’ (2015) TDM 12; Sumeet Kachwaha,’The Rule Against Bias and the

Jurisprudence of Arbitrator’s Independence and Impartiality’(2021) 17(2) AIAJ 104

25 Vibhu Bakhru J, ‘Impartiality and Independence of the Arbitral Tribunal’ in Shashank Garg(ed),Arbitrator’s

Handbook (Lexis Nexis 2022)

26 Halliburton Co. v Chhub Bermuda Insurance Ltd [2020] UKSC 48

27 Hancock v Hancock Prospecting Pty Ltd [2022] NSWSC 724

28 Re Shankar Alan s/o Anant Kulkarni [2007] 1 SLR(R) 85 at [75]–[76]

29 Gary Born (n 12) 3946

986 [2024] 3 S.C.R.

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national standards of independence and impartiality may

be relevant to identifying international standards, just

as domestic standards of procedural fairness can be

relevant under Article V(1)(b), these standards should be

considered with caution in international contexts. ….Only

in rare cases should domestic standards of independence

or impartiality be relied upon to produce a different result

from that required by international standards”.

25. Embracing international standards in arbitration would foster trust,

certainty, and effectiveness in the resolution of disputes on a global

scale. The above discussion would persuade us to say that in India,

we must adopt an internationally recognized narrow standard of public

policy, when dealing with the aspect of bias. It is only when the most

basic notions of morality or justice are violated that this ground can

be attracted. This Court in Ssangyong Engineering & Construction

Co. Ltd. v. National Highways Authority of India (NHAI)30 had noted

that the ground of most basic notions of morality or justice can only

be invoked when the conscience of the Court is shocked by infraction

of fundamental notions or principles of justice.

26. In view of the above discussion, there can be no difficulty in holding

that the most basic notions of morality and justice under the concept

of ‘public policy’ would include bias. However, Courts must endeavor

to adopt international best practices instead of domestic standards,

while determining bias. It is only in exceptional circumstances that

enforcement should be refused on the ground of bias.

27. Let us now turn to the present facts. The Award in this matter was

passed in Singapore, a New York Convention Country and notified31

as a reciprocating territory by India. Chapter 1 Part II of the Indian

Arbitration Act is applicable in the present case. The parties had

expressly chosen Singapore as the seat of Arbitration. It is the seat

court which has exclusive supervisory jurisdiction to determine

claims for a remedy relating to the existence or scope of arbitrator’s

jurisdiction or the allegation of bias32. A contrary approach would go

30 [2019] 7 SCR 522 : (2019) 15 SCC 131

31 Gazette Notification S.O.542(E) dated 06.7.1999

32 AV Dicey and L. Collins, Dicey, Morris & Collins on the Conflict of laws(15th edn, Sweet and Maxwell

2018) [16-36]

[2024] 3 S.C.R. 987

Avitel Post Studioz Limited & Ors. v. HSBC PI Holdings (Mauritius)

Limited (Previously Named Hpeif Holdings 1 Limited)

against the scheme of the New York Convention which has been

incorporated in India. The jurisdiction was therefore chosen based

on the perceived neutrality by the parties aligning with the principle

of party autonomy. Interestingly in the present case, no setting aside

challenge based on bias was raised before the Singapore Courts

by the appellants within the limitation period. In this context, the

Bombay High Court in a judgment in Perma Container (UK) Line

Limited v Perma Container Line (India) Ltd33 had noted that since the

objection of bias was not raised in appropriate proceedings under

the English Arbitration Act,1996, it could not be raised at the postaward Stage. Similarly, this Court in Vijay Karia (supra) had noted

that no challenge was made to the foreign award under the English

Arbitration Law, even though the remedy was available. Rejecting

the challenge to the award on the ground of bias, the Court in Vijay

Karia (supra) remarked that the Award Debtors were indulging in

“speculative litigation with the fond hope that by flinging mud on a

foreign arbitral award, some of the mud so flung would stick”. Similar

view has also been taken by the German Supreme Court in Shipowner

(Netherlands) v Cattle and Meat Dealer (Germany)34, where it was

held that the objection of bias must be first raised in the Country

of origin of the Award and only if the objection was rejected or was

impossible to raise, could it be raised at the time of enforcement.

28. In the present case also, the Award Holders had challenged the

appointment of Mr. Christopher Lau SC and Dr Pryles before SIAC

only on the ground that the Tribunal had intentionally fixed November

2013 for hearing knowing that it coincided with the Diwali vacation

and that the Indian counsel would therefore not be available. This

challenge was dismissed by the SIAC Committee of the Court of

Arbitration in its decision dated September 13, 2014. Therefore,

none of the other grounds now being pressed were raised during

the arbitration or in the time period available to the appellants to

apply, to set aside the Award in Singapore.

29. It needs emphasizing that bonafide challenges to arbitral appointments

have to be made in a timely fashion and should not be used

strategically to delay the enforcement process. In other words, the

33 2014 SCC OnLine Bom 575

34 Dutch Shipowner v. German Cattle and Meat Dealer, Bundesgerichtshof, Germany, 1 February 2001,

XXIX Y.B.Com. Arb. 700 (2004)

988 [2024] 3 S.C.R.

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Award Debtors should have applied for setting aside of the Award

before the Singapore Courts at the earliest point of time.

Implications of the IBA Guidelines

30. The High Court in this case applied the reasonable third-person

test contained in the IBA Guidelines to conclude that there is no

requirement of disclosure and bias. The IBA Guidelines are a collective

effort of the arbitration community to define as to what constitutes

bias. However, bias has to be determined on a case-to-basis but

Courts should attempt to apply international standards, while dealing

with challenges at the enforcement stage.

31. The implications of the IBA Guidelines and their application will now

have to be considered.

32. The IBA Guidelines have also been adopted in the V and VII Schedule

to the Indian Arbitration Act and since the Award here is dated

27.09.2014, the IBA Guidelines of the year 2004 would be relevant

and applicable. The working group of the IBA had determined the

standards/guidelines to bring about clarity and uniformity of application

and accordingly, the Red, Orange and Green lists were appended

to the Guidelines, to ensure consistency and to avoid unnecessary

challenges and withdrawals and removals of arbitrators. The IBA

Guidelines require an arbitrator to refuse appointment in case of

any doubts as to impartiality or independence. The Arbitrator is also

expected to disclose such facts or circumstances to the parties which

might compromise the arbitrator’s impartiality or independence. In the

event of any doubt on whether an arbitrator should disclose certain

facts or circumstances, the issue should be resolved in favour of

disclosure. This is because an arbitrator is not expected to serve in

a situation of conflict of interest. An arbitrator is also under a duty

to make reasonable enquiry to investigate any potential conflict of

interest.

33. The relevant entries in the non-waivable Red list, the waivable Red

list, the Orange list and the Green list would suggest that those were

intended to ensure the fairness of the process and also make certain

that the arbitrator is impartial and also independent of the parties.

Such position of the arbitrator vis-à-vis the dispute should exist not

only while accepting the appointment but must continue throughout

the entire arbitration proceeding until it terminates.

[2024] 3 S.C.R. 989

Avitel Post Studioz Limited & Ors. v. HSBC PI Holdings (Mauritius)

Limited (Previously Named Hpeif Holdings 1 Limited)

34. In the impugned judgment, the High Court adverted to the IBA

Guidelines in some detail and noticed that Mr. Christopher Lau

(Chairman of the Arbitral Tribunal) was an independent non-executive

Director of two companies – Wing Tai and Neptune. The learned

judge then considered whether he ought to have disclosed such

relationship before taking up the assignment of arbitration. The

Court noticed that the Award Debtors raised an omnibus objection

and had invoked the non-waivable Red list as well as the waivable

Red list as also the Orange list of the IBA Guidelines to claim that

the arbitrators were under a duty of disclosure. With such broadbased contentions, the appellants urged that Mr. Lau having failed to

disclose the circumstances, the likelihood of bias was very strong and

this would vitiate the foreign Award, sought to be enforced in India.

35. Adverting to the specific entries in the IBA Guidelines, pertaining to

the alleged bias of Mr. Christopher Lau (the Chairman of the Arbitral

Tribunal), the High Court reached the following conclusion:

35.1. The circumstance alleged by the award debtor for arbitral bias

is the business interaction between one of the group companies

of the award holder with independent private companies i.e.,

Wing Tai and Neptune wherein Mr. Lau was an independent

non-executive director. However, neither Wing Tai or Neptune

fall within the definition of “affiliate” of the award holder as

per the IBA Guidelines. It was therefore concluded that no

reasonable third person would conclude that justifiable doubts

arise about impartiality or independence of Mr. Lau. Thus, there

exists no identity or conflict of interest between Mr. Lau and

the award holder, or any of its affiliates including its holding

company i.e. HSBC PLC (UK).

35.2. While the award debtors’ suggest their case implies a need

for disclosure beyond the ‘Red’ or ‘Orange’ lists, and the

inapplicability of the ‘Green list, the ‘reasonable third person’

test is the measure for assessing conflict of interest. The High

Court concluded that the award debtors have not established

that an impartial observer, aware of all facts, would doubt

Mr. Lau’s impartiality or independence and consequently, the

likelihood of bias of the arbitrator is not discernible.

35.3. The award holder provided ample evidence countering the

award debtors’ claims about its affiliate’s roles as book-runners 

990 [2024] 3 S.C.R.

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and underwriters with Wing Tai and Neptune, by showing

joint participation of various other banks. The allegation of a

significant shareholding by a wholly-owned subsidiary of the

award holder’s affiliate in Wing Tai and Neptune was found

unsupported by evidence. The affiliate was one amongst

many in the fund-raising and held the shares in trust during

the course of business.

35.4. Even upon applying the subjective approach for disclosure,

wherein the disclosure requirement is viewed from the Award

Debtors’ point of view, certain limitations apply, as per the

Green list of the IBA Guidelines. Placing reliance upon Clauses,

4.5 and 4.53 of the Green list, the learned Judge of the High

Court found no conflict of interest between the arbitrator and

the award holder or its affiliates. In case, the circumstances

alleged fall under the green list, no duty of disclosure is owed

by the arbitrator.

36. The above discussion in the impugned judgment in our assessment

correctly suggests that Mr. Christopher Lau neither had a duty to

disclose nor did he fail to discharge his legal duty of disclosure

in accepting the assignment as the Presiding Arbitrator. In the

circumstances here, we cannot infer bias or likelihood of bias of the

Presiding Arbitrator. Award Debtors therefore cannot claim that there

is any violation of the public policy, which would render the foreign

award unenforceable in India.

37. Nevertheless, it would also be appropriate to address one specific

contention raised by the Award Debtors on the communication

addressed by Mr. Christopher Lau to an enquiry made on 03.02.2016,

by one Ms. Pauline. In his response, Mr. Lau refused to accept the

suggested assignment stating that there is conflict of interest in his

taking action against HSBC. The circumstances under which the

above communication was addressed by Mr. Lau are explained in

detail in Mr. Lau’s letter dated 26.04.2016. A reading of the response

would show the reason for the response to Ms. Pauline. It would

also additionally confirm that Mr. Christopher Lau during the phase

when he acted as the Presiding Arbitrator between the appellants

and the respondent, was not subject to any conflict of interest. He

is held to have duly complied with the disclosure obligation and no

bias or improper conduct can be attributed to rendition of the Award

dated 27.09.2014 by Mr. Lau, as the President of the Arbitral Tribunal. 

[2024] 3 S.C.R. 991

Avitel Post Studioz Limited & Ors. v. HSBC PI Holdings (Mauritius)

Limited (Previously Named Hpeif Holdings 1 Limited)

38. Another point on the above aspect i.e. the timing of the communication

would also need our attention. The communication by Ms. Pauline

was made in the year 2016, much after the final Award was rendered

on 27.09.2014. When the explanation of Mr. Christopher Lau in his

communication dated 26.04.2016 is examined in the context of the

roving query made by the third party, well beyond the Award, we

have no hesitation to hold that there was no disability on the part of

Mr. Lau to conduct the arbitral proceedings between the appellants

and the respondent.

39. We, therefore, conclude that there is no bias factor operating against

Mr. Lau that would violate the most basic notions of morality and

justice or shock the conscience of the Court.

Onerous Travails

40. This case has unfortunately seen a protracted and arduous battle

to enforce an award for over 10 long years, with multiple phases

of litigation. The arbitration itself commenced in Singapore on

11.05.2012, when notice of arbitration was issued by the respondent.

Then the SIAC Emergency Awards were rendered on 28.05.2012

and 29.05.2012. Proceedings were then initiated by the award

holder under S. 9 of Indian Arbitration Act at the Bombay High Court,

seeking deposit of security amount to the extent of their claims. In the

meanwhile, the award debtors’ objections on the grounds of jurisdiction

were dismissed by the arbitral tribunal through a Final Partial Award

on 17.12.2012. In the Section 9 proceedings, the appellants were

directed to deposit a certain sum for enforcement of the award. The

award debtor challenged the same before the Supreme Court, which

was subsequently dismissed and culminated in an order to maintain

the specified amount in the award debtor’s account. However, the

award debtors’ failure to maintain their account to the ordered extent,

led to the contempt proceedings before the Supreme Court, which

were disposed of vide orders dated 02.09.2022 & 09.09.2022.

41. Meanwhile, the Final Award was issued on 27.09.2014, which was

sought to be set aside by the award-debtor through an application

under 34 of the Indian Arbitration Act before the High Court. The

same was dismissed as not maintainable on 28.09.2015. An appeal

against the same was filed & dismissed subsequently. Simultaneously

the award holder sought to enforce the award through an Arbitration

Petition before the High Court. As a result, the enforcement 

992 [2024] 3 S.C.R.

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proceedings culminated in the impugned orders dated 25.04.2023 of

the High Court whereby the final award was rendered enforceable.

42. This long list of events points to a saga of the award-holder’s

protracted and arduous struggle to gather the fruits of the Award. The

Award Debtors raised multiple challenges and also defied the Court’s

order. They had to serve jail time for such contemptuous actions. In

this backdrop, the travails of Award holders suggest a Pyrrhic victory.

It is not unlike the situation articulated by the playwright & author

Oscar Wilde who commented - “In this world, there are only two

tragedies. One is not getting what one wants, and the other is getting

it.”35 As can be noticed, in this case, despite the award being in their

favour, the award-holders found themselves embroiled in multiple

litigations in different forums by the concerted and unmerited action

of the appellants. It will bear mention here, that in every forum the

award debtors have lost and Courts’ verdicts are in the favour of

the award holders. Despite this, the benefit of the foreign award is

still to reach the respondents. This sort of challenge where arbitral

bias is raised at the enforcement stage, must be discouraged by our

Courts to send out a clear message to the stakeholders that Indian

Courts would ensure enforcement of a foreign Award unless it is

demonstrable that there is a clear violation of morality and justice. The

determination of bias should only be done by applying international

standards. Refusal of enforcement of foreign award should only be

in a rare case where, non- adherence to International Standards is

clearly demonstrable.

43. The High Court in this matter has rightly held that the award-debtors

have failed to substantiate their allegation of bias, conflict of interest

or the failure by the Presiding Arbitrator to render disclosure to

the parties, as an objection to the enforcement of the award. The

award debtors have failed to meet the high threshold for refusal

of enforcement of a foreign award under Section 48 of the Indian

Arbitration Act. Accordingly, the decision given by the High Court for

enforcement/execution of the foreign award stands approved. The

appeals are found devoid of merit.

44. Even as the appeals filed by the award debtors are dismissed, the

respondents, notwithstanding their victory in all the legal battles until

35 Oscar Wilde, Act III, Lady Windermere’s Fan, 1893 

[2024] 3 S.C.R. 993

Avitel Post Studioz Limited & Ors. v. HSBC PI Holdings (Mauritius)

Limited (Previously Named Hpeif Holdings 1 Limited)

now, must not be allowed to feel that theirs is a case of winning the

battle but losing the war. In the circumstances, we emphasize the

need for early enforcement of the foreign award by the competent

forum, without showing any further indulgence to the award debtors. It

is ordered accordingly. The appeals stand dismissed on these terms.

45. Pending application(s), if any, shall stand closed.

Headnotes prepared by: Ankit Gyan Result of the case:

Appeals dismissed.