The hon’ble Supreme Court of India (Supreme Court) in the matter of Avitel Post Studioz Limited v. HPEIF Holdings 1 Limited upheld the High Court’s decision facilitating enforcement of final award dated September 27, 2014 issued in SIAC Arbitration and held that enforcement of foreign awards should be refused on the ground of bias only in exceptional circumstances. The Court emphasized that in assessing arbitral bias, it is imperative for the Court to adhere to international standards rather than domestic ones.
The Division Bench consisting of Hrishikesh Roy and Prashant Kumar Mishra, JJ. considered whether the High Court was correct in rejecting the objection under Section 48(2)(b) of Arbitration Act against enforcement of foreign Award on grounds of arbitral bias and violation of public policy, and whether the ground of bias could be raised at the enforcement stage for being violative of the ‘public policy of India’ and ‘most basic notions of morality or justice’.
While arriving at the decision, the Supreme Court stated that the legal framework concerning enforcement of certain foreign awards is contained in Part II of the Arbitration Act and therefore, it must be underscored 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. A review on the merits of the dispute is impermissible.
Additionally, referring to the various approaches of courts across the world in context, the Supreme Court held that “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.” Applying this, the Supreme Court upheld the High Court’s decision and emphasized the need for early enforcement of the foreign award by the competent forum, without showing any further indulgence to the award debtors.