The Supreme Court of India upheld the Bombay High Court's decision to enforce a foreign arbitration award rendered by the Singapore International Arbitration Centre (SIAC). The appellants had objected to the enforcement on the grounds of alleged bias by the presiding arbitrator, Christopher Lau SC, and claimed that enforcement would violate India's public policy under Section 48 of the Arbitration and Conciliation Act, 1996. The Court, however, held that the appellants failed to demonstrate sufficient grounds for bias, and rejected their claims, reaffirming that international standards must guide public policy in enforcing foreign awards.

1. Background (Paras 5.1 - 5.2):
   HSBC PI Holdings (Mauritius) Ltd. invested $60 million in Avitel Post Studioz Limited for a 7.8% stake, based on the latter's claim of a contract with BBC, which turned out to be fraudulent.

2. Initiation of Arbitration (Paras 5.3 - 5.6):
   HSBC, upon discovering the fraudulent misrepresentation, invoked arbitration under SIAC rules, claiming damages for the $60 million investment. An interim award was passed, restraining the appellants from diminishing the value of their assets.

3. Arbitral Award (Para 5.7):
   On 27th September 2014, the arbitral tribunal directed the appellants to pay $60 million in damages for fraud. This award was challenged by the appellants on grounds of non-arbitrability due to fraud allegations.

4. Challenge to Enforcement (Paras 6 - 11):
   The appellants raised objections against the enforcement under Section 48 of the Arbitration and Conciliation Act, arguing that the presiding arbitrator failed to disclose conflicts of interest and that enforcement would violate public policy due to bias.

5. Court’s Analysis on Bias (Paras 13 - 26):
   The Supreme Court applied international standards for public policy, emphasizing a narrow interpretation of bias. The Court found no evidence of bias or conflict of interest on the part of the arbitrator, noting that the appellant had failed to raise these objections in a timely manner.

6. Public Policy and Enforcement of Foreign Awards (Paras 15 - 21):
   India, being a signatory to the New York Convention, is bound by its pro-enforcement bias. The Court reiterated that enforcement of foreign arbitral awards can only be refused if they violate fundamental notions of morality and justice.

7. Conclusion (Paras 44 - 45):
   The Supreme Court dismissed the appeals, approving the enforcement of the foreign award, and emphasizing that prolonged challenges aimed at delaying enforcement should not be entertained.

Acts and Sections Discussed:

1. Arbitration and Conciliation Act, 1996

   • Section 48: Conditions for enforcement of foreign awards, including grounds for refusal on the basis of public policy.
   • Section 9: Interim measures by a court.

2. New York Convention (1958):

   • Basis for the enforcement of foreign arbitral awards and limiting grounds for refusal of recognition based on public policy.

Ratio Decidendi:
The Supreme Court clarified that allegations of bias and conflict of interest must meet international standards when raised in enforcement proceedings. Challenges based on bias should have been raised during the arbitral proceedings, and cannot be raised retrospectively at the enforcement stage. The Court affirmed the pro-enforcement bias under the New York Convention, asserting that minimal judicial interference is allowed in enforcing foreign arbitral awards unless a clear violation of fundamental principles is demonstrated.

Subjects:
Foreign Arbitration, Bias, Public Policy, Enforcement of Foreign Awards, Singapore International Arbitration Centre, Fraud, International Commercial Arbitration, Arbitration and Conciliation Act, New York Convention, Judicial Precedent on Arbitration.