By Mahika Roy.
Mahika Roy is a Research Scholar at the Milon K. Banerji Arbitration Centre.
The Hon’ble Supreme Court in Nagaraj V. Mylandla v. PI Opportunities Fund-I & Ors. has reaffirmed India’s pro-enforcement stance towards foreign arbitral awards by holding that enforcement under Section 48 of the Arbitration and Conciliation Act, 1996 cannot be resisted on “public policy” grounds where the same issues have already been conclusively adjudicated by the seat court. The Court recognised and applied the doctrine of transnational issue estoppel, holding that Indian courts cannot re-examine issues decided by a competent foreign court under the guise of enforcement. This ruling significantly limits the scope of objections under Section 48 and reinforces finality in cross-border arbitration.
The dispute arose from a Share Subscription and Shareholders Agreement between investors and the promoters of Financial Software and Systems Pvt. Ltd. The agreement contained a detailed exit mechanism enabling investors to realise their investment through methods such as secondary sale, buy-back, or strategic sale.
Following the failure of the promoters to provide an exit, arbitration was initiated under the Singapore International Arbitration Centre (SIAC) Rules, with Singapore as the seat. The arbitral tribunal rendered an award in July 2024 granting damages to the investors equivalent to the exit price and providing for a strategic sale mechanism in case of non-payment.
The award was challenged before the Singapore High Court, which rejected the challenge and upheld the award. Notably, issues such as waiver, buy-back, and alleged violations of Indian law were considered and rejected. No appeal was filed against this decision.
Subsequently, enforcement proceedings were initiated before the Madras High Court under Sections 47 and Section 49 of the A&C Act. The appellants resisted enforcement under Section 48, primarily invoking the “public policy of India” exception. The High Court rejected these objections, applied transnational issue estoppel, and enforced the award. The matter then reached the Supreme Court.
The central issue before the Supreme Court was whether enforcement of a foreign arbitral award could be refused under Section 48 on public policy grounds when the same objections had already been raised and rejected by the seat court. A related issue concerned whether Indian courts could re-examine the merits of the award or revisit findings of the seat court during enforcement proceedings.
A bench comprising Justices Sanjay Kumar and K. Vinod Chandran dismissed the appeals and upheld enforcement of the foreign arbitral award. It was held that the objections raised were impermissible attempts to reopen issues already adjudicated and to undertake a merits review under the guise of Section 48.
It was reiterated that Section 48 provides only limited and narrowly construed grounds to refuse enforcement of a foreign award. Enforcement proceedings were characterised as non-appellate in nature, where re-evaluation of evidence or contractual interpretation is impermissible. Reliance was placed on Vijay Karia v. Prysmian Cavi E Sistemi SRL to emphasise that Indian courts must adopt a pro-enforcement bias and discourage attempts to delay enforcement through expansive interpretations of public policy.
A central aspect of the reasoning was the application of the doctrine of transnational issue estoppel. It was held that where a competent court at the seat of arbitration has conclusively decided issues relating to the validity of the award, the same issues cannot be reopened in enforcement proceedings in another jurisdiction.
The objections raised by the appellants, including those relating to waiver, buy-back, and alleged statutory violations, had already been considered and rejected by the Singapore High Court. In the absence of any appeal against that decision, those findings attained finality. It was therefore impermissible for the appellants to reagitate the same issues in India under the guise of public policy. The doctrine was applied as a facet of comity, judicial discipline, and prevention of abuse of process.
It was emphasised that enforcement proceedings cannot be converted into a forum for rehearing the dispute. The objections raised by the appellants were found to be attempts to revisit the arbitral tribunal’s interpretation of contractual provisions and findings of fact. Such attempts were held to fall outside the permissible scope of Section 48.
It was further observed that objections which could have been raised before the seat court, but were not, cannot be permitted to be introduced for the first time at the enforcement stage, consistent with the principle of Constructive Res Judicata. Allowing such challenges would undermine finality and encourage tactical litigation.
The Court clarified that the “public policy of India” exception under Section 48 must be construed narrowly and cannot be invoked to undertake a review on merits. It was held that the concept of public policy refers to violations of fundamental and non-negotiable legal principles forming the core of Indian law, and not to mere errors of law or alleged inconsistencies with statutory provisions.
The contention that the award violated provisions of the Companies Act or the Specific Relief Act was rejected on the ground that such arguments did not meet the high threshold required to establish a breach of fundamental policy. It was further noted that such issues had already been considered by the seat court and could not be revisited. The Court emphasised that enforcement proceedings are not intended to serve as a second round of challenge to the award.
It was further observed that, even independent of the application of transnational issue estoppel, the scope of interference under Section 48 remains narrowly circumscribed and does not permit a review on merits. The Supreme Court has consistently held that enforcement proceedings are not appellate in nature and cannot be used to re-evaluate findings of fact or law.
However, the present decision goes a step further by holding that where such issues have already been raised and conclusively decided by the seat court, they cannot be re-agitated at the enforcement stage in India. In this sense, the doctrine of transnational issue estoppel operates as an additional layer of restraint, beyond the already limited scope of Section 48.
Even in a situation where no challenge had been mounted before the seat court, the scope of interference would remain restricted to the narrow contours of public policy. The present case, therefore, underscores that where a party has already invoked the jurisdiction of the seat court and failed, it cannot seek a second review under the guise of enforcement proceedings.
This judgment marks a significant development in Indian arbitration jurisprudence by firmly embedding the doctrine of transnational issue estoppel within the framework of enforcement under Section 48. The ruling strengthens India’s position as a pro-enforcement jurisdiction by ensuring that foreign awards are not subjected to multiple layers of judicial scrutiny. It clarifies that enforcement proceedings are not an opportunity to relitigate disputes or raise belated objections after failing before the seat court. For arbitration practice in India, the decision enhances finality, certainty, and efficiency in cross-border dispute resolution. It aligns Indian law with international arbitration principles by recognising the primacy of the seat court and limiting judicial interference at the enforcement stage. Ultimately, the judgment curbs dilatory tactics and reinforces the integrity of the arbitral process.
Copyright© 2026 Milon K. Banerji Centre for Arbitration Law instituted at NALSAR University of Law, Hyderabad. All rights reserved.
