Avitel Post Studioz Limited vs HSBC PI Holdings (Mauritius) Limited 2024 INSC 242 – Foreign Arbitration Award Enforcement – Challenge On Ground Of Bias

Arbitration and Conciliation Act,1996 ; Section 48(2)(b) – 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 -bonafide challenges to arbitral appointments have to be made in a timely fashion and should not be used strategically to delay the enforcement process (PAra 26-29) – 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. (Para 42)

Arbitration and Conciliation Act,1996 ; Section 48(2)(b) and Section 34(2)(b)(ii) – 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 – Referred to Shri Lal Mahal Ltd. v Progetto Grano SpA (2014) 2 SCC 433. (Para 19)

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