The present case is a pivotal judgemnt whein the Apex Court allowed the enforcenment of a foreign arbitral award and held that only under exceptional cases an enforcement of foreign arbitral award can be declined on the grounds of bias. The Appellants in the present case contested the enforcement of a foreign award under Section 48 of the Arbitration Act. The High Court upheld the enforcement, allowing attachment orders to continue. Thereafter, the Respondnets alleged fraud in securing a US$ 60 million investment, leading to arbitration where damages were awarded. The Apex Court affirmed the arbitrability of fraud under Section 9. When the Appellants failed to comply, contempt proceedings ensued, resulting in imprisonment.
The Apex Court assessed objections under Section 48(2)(b), focusing on arbitral bias and public policy violations. Referring to Vijay Karia v. Prysmian Cavi E Sistemi SRL and Shipowner (Netherlands) v. Cattle and Meat dealer (Germany), the Apex Court stressed that challenges to enforcement have limited scope and should be justified only in exceptional cases of blatant disregard of Section 48. Further, the Court stated that the objection of bias must be first raised in the country of origin of award and not directly at the time of enforcement.
The Court made a reference to the New York Convention and cited its decision in Ssangyong Engg. & Construction Co. Ltd. v. NHAI and concluded that the most basic notions of morality and justice under the concept og ‘public policy’ would include bias.
The Apex Court highlighted the need for adopting international best practices in determining bias and emphasized that enforcement should only be refused in exceptional circumstances. After examining the implications of IBA Guidelines, the Court found no bias that violated fundamental notions of morality and justice. Consequemtly, the Apex Court upheld the High Court's decision.