Minimal Interference, Maximum Efficacy: Enforcement of Foreign Commercial Arbitral Awards in India Post-2015

-       Abdul Haseeb[1]

Introduction

1. Foreign commercial awards are enforced in India under Part II of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”), which incorporates the New York Convention. A foreign award is defined under Section 44 as an arbitral award on commercial differences made in a New York Convention country under a written arbitration agreement. To enforce such an award, the award-holder must file an application in the appropriate High Court, usually where the award-debtor resides or holds assets, producing the original award and arbitration agreement or certified copies. Section 47 requires the award-holder to prove the award’s authenticity and status as a foreign award. If satisfied, the High Court treats the award as a decree under Section 49 and can order its execution.

2. The Act also incorporates a strict time‑bar: enforcement proceedings must be brought within three years of the accrual of the right to apply. In a 2020 judgement, Vedanta Ltd. v. Government of India[ AIR 2020 SC 4550], the Supreme Court held that Section 5 of the Limitation Act applies to foreign awards, allowing three years from accrual to apply for enforcement. The Court emphasized that an enforcement court can only refuse enforcement under Section 48 and has no power to set aside a foreign award, as only the courts of the place of arbitration (seat) have that power.

3. In practice, therefore, enforcement involves filing a Section 47 petition with the High Court and proving formal requisites. The court then applies Section 48(1)‐(2), which lists narrow conditions under which enforcement may be refused. Common procedural grounds include incapacity of a party or invalid agreement, lack of notice, award beyond scope, or improper tribunal composition. Additionally, if an award has been set aside at its seat, the enforcement court may adjourn or refuse enforcement.

Section 48: Grounds of Refusal – “Public Policy” and Fraud

4. The key substantive grounds for refusing enforcement of a foreign award are in Section 48(2) of the act. First, the subject-matter of the dispute must be arbitrable under Indian law.[2] Second, and most critically, enforcement can be refused if it is “contrary to the public policy of India”.[3] The Arbitration Act’s 2015 amendment significantly narrowed this exception. Section 48(2)(b) provides that enforcement may be refused if it is contrary to fundamental policy or justice/morality or if the award was induced by fraud or corruption.[4] The Explanation to Section 48 makes clear that an award is “in conflict with the public policy of India” only if it was induced by fraud or corruption, or violated key arbitration provisions, or if it contravenes the fundamental policy of Indian law or shocks the “most basic notions of justice or morality”.[5] Crucially, the Act expressly bars reviewing the merits of the case in determining “fundamental policy”.

5. In short, Indian law today recognizes only three kinds of public-policy breach: (i) serious impropriety in obtaining the award, such as fraud, (ii) contradiction of a fundamental national policy, or (iii) violation of basic justice or morality. All other objections, such as an alleged legal error by the tribunal, do not by themselves violate public policy. These provisions largely mirror the New York Convention’s Article V(2)(b) with a restrictive gloss.

Judicial Interpretation of Section 48 – Evolving Jurisprudence

6. The Hon’ble Supreme Court in 1993 in the case of Renusagar Power v. GE [AIR 1994 SC 860] (“Renusagar”) set the foundational standard. The Supreme Court held that “public policy” under the prior Foreign Awards Act (and now Section 48) means Indian public policy, but only its fundamentals. An award offends public policy only if enforcement would contravene (i) “a fundamental policy of Indian law,” (ii) India’s interests, or (iii) justice or morality. Mere violation of a statute or contract alone was deemed insufficient to refuse enforcement. This decision established a pro‑enforcement regime, emphasizing that review must be minimal.

7. Subsequent cases in this era reaffirmed Renusagar’s limited view. For example, Shri Lal Mahal Ltd. v. Progetto Grano Spa AIRONLINE 2013 SC 191 explicitly overruled the intermediate case Phulchand Exports v. OOO Patriot [2011] 10 SCC 300, which had allowed courts to consider “patent illegality” in foreign awards. In Shri Lal Mahal, the Court declined to re-open the merits of the award and reaffirmed that an enforcement court cannot re-examine the arbitrators’ findings. Likewise a 2020 judgement, Vijay Karia v. Prysmian [AIR 2020 SC 1807], applied these principles to foreign LCIA awards: the Court held that contravention of India’s foreign-exchange law (FEMA) was not a breach of fundamental policy, distinguishing the civil-compliance orientation of FEMA from the draconian FERA regime. Thus, Vijay Karia reinforced that only truly fundamental legal norms and not routine regulatory violations fall within the public-policy exception. The Court noted that enforcing these foreign awards did not offend India’s basic policy. Notably, Vijay Karia also imposed heavy costs (₹5,000,000) on the award-debtors for abusing enforcement proceedings, signalling that dilatory or strategic objections like re-litigating settled issues will be penalized.

8. In Government of India v. Vedanta Ltd. [AIR 2020 SC 4550], the Hon’ble Supreme Court further underscored minimal interference. Dealing with a large UNCITRAL award (USD 278,871,668), the Court reiterated that an enforcement court cannot set aside a foreign award; only the court at the place of arbitration has that power. Accordingly, Indian courts will enforce awards unless a narrow Section 48 ground is clearly met.

9. The apex Court’s latest pronouncement came in the year 2024 in the case of Avitel Post Studioz Ltd. & Ors. v. HSBC PI Holdings (Mauritius) Ltd. [2024] 7 SCC 197. In Avitel, a Singapore‐seat SIAC award was challenged on the sole ground that the presiding arbitrator had undisclosed affiliations thus asserting bias. The Supreme Court unanimously upheld enforcement, emphasizing the international standard for public policy. It held that while bias can, in principle, violate public policy, a narrow and internationally-aligned test applies. Only in exceptional cases where “the most basic notions of morality or justice are violated” should enforcement be refused on bias grounds [¶23-24]. The Court noted that Avitel never raised the conflict in the Singapore proceeding, and the facts did not even meet the IBA guidelines for disqualification, so no “wholesale violation” of justice occurred [¶39]. Crucially, it restated that foreign awards merit “minimal judicial interference”: merely alleging bias without a clear nexus to public policy will not succeed [¶24]. The Court also underscored that challenges to arbitrator bias belong primarily in the seat jurisdiction, not India [¶35]. In short, Avitel confirms that Indian courts will enforce foreign commercial awards except in truly egregious circumstances.

Common Grounds of Resistance and Key Authorities

Public Policy – Section 48(2)(b)

10. Consistent with Renusagar and its progeny, Indian courts treat the public-policy exception in enforcement very restrictively. Aside from fraud and basic morality, courts interpret “fundamental policy” narrowly. For example, Vijay Karia held that a regulatory breach is remediable and not a fundamental policy breach. Similarly, challenges based on allegations of “patent illegality”, as once allowed under Phulchand Exports, are now foreclosed after Shri Lal Mahal. In practice, only violations of constitutional or legislative touchstones (e.g. national security, violation of a fundamental legislative objective) are likely to qualify.

11. A useful distillation is that Section 48(2)(b) has been narrowed by statute to the three categories in the Explanation. Indian courts will not entertain broad notions of public policy that would require re-trying the dispute. As the Supreme Court puts it, an enforcement court may refuse a foreign award “only if the most basic notions of morality or justice are violated”. As laid down in Perma Container (UK) Line Ltd. v. Perma Container Line (India) (P) Ltd. [2014 SCC OnLine Bom 575] and also followed in Mercator Ltd. v. Dredging Corpn. of India Ltd. [2024 SCC OnLine Del 3075]. This aligns India with the international norm that public-policy review of foreign awards is limited. For instance, biases or conflicts will be disregarded absent extreme facts, as in Avitel. Likewise, India’s interest and justice/morality tests track Article V(2)(b) of the New York Convention.

Fraud and Corruption

12. The Act explicitly lists fraud and corruption as public-policy grounds. If an award is tainted by bribery or fraud on the arbitral process itself, enforcement may be refused. However, fraud must be proven as directly affecting the award. Indian courts will be cautious: a mere allegation of contract fraud does not automatically defeat enforcement unless it rises to the level of corrupting the arbitration. In Avitel, for example, HSBC had alleged fraudulent misrepresentation by the debtor and had won a USD 60m award for fraud; the enforcement court enforced the award without re-litigating whether fraud occurred. By contrast, if an award were obtained by bribing an arbitrator or similar misconduct, Section 48 clearly permits refusal.

13. Overall, post-2015 the fraud exception is the main way to challenge enforcement on merits. But the courts generally require clear and pleaded evidence of fraud affecting the award. Claims of mere contractual fraud or misrepresentation, as opposed to fraud on the tribunal, have not been allowed to upset enforcement.[6] As the SC notes, the fraud exception under Section 48(2)(b) is meant to address “common sense” situations, it does not reopen the case on ordinary misstatements.[7]

Complications in Enforcement: Interim Relief and Parallel Proceedings

14. Even with a pro-enforcement stance, practical obstacles can arise. One issue is interim relief pending enforcement. Unlike domestic arbitrations where Section 17 and 9 empower courts to grant interim measures, foreign arbitrations have no counterpart interim-protection provision in Part II. However, parties have persuaded courts that Section 9 still applies to foreign‑seat arbitrations absent an express opt-out. In Aircon Beibars Fze v. Heligo Charters, the award-creditor obtained urgent injunctive relief over the debtor’s sole Indian asset by invoking Section 9. The court held that Section 2(2) of the Act, which limits Section 9 if parties agree to exclude Indian interim relief, requires clear language in the contract to oust Section 9. This position was further affirmed by the Supreme Court in a 2021 judgement, PASL Wind Solutions Private Limited v. GE Power Conversion India Private Limited [AIR 2021 SC 2517], which clarified that the court's power to grant interim relief under Section 9 for foreign-seated arbitrations can only be excluded through a clear and express agreement to the contrary. Thus, unless the arbitration agreement explicitly rules out Indian emergency relief, award‑holders may apply under Section 9 to preserve assets pre-enforcement. This underscores the need for careful clause-drafting: a foreign company might expressly reserve Section 9 rights if desired, or exclude it if not.

15. “Overlapping domestic proceedings” can also complicate enforcement. Parties sometimes file parallel suits or petitions in Indian courts, to declare a contract void, obtain ad-hoc injunctions, or frustrate enforcement. Indian courts generally resist such forum-shopping.[8] For example, Section 45 obliges a court seized of a domestic suit to refer the matter to arbitration if a valid agreement exists. If a losing party sues in India on the same dispute, the court should either refer it to arbitration or stay the suit. Similarly, once an arbitration award exists, courts will not entertain collateral attacks beyond Section 48 grounds.[9] In Avitel, HSBC obtained orders freezing Indian assets pending enforcement, and the Bombay HC refused to entertain repeated challenges. The Supreme Court later chided the debtors for using enforcement proceedings as a surrogate appeal, stressing that bias or other objections should have been raised in the arbitration at the seat [¶56].

16. This can also lead to contractual disputes, for instance, Indian parties have at times resisted enforcement by arguing that the arbitration agreement itself was invalid or the contract was void. The courts have been firm that such arguments fall squarely within Section 48(1) or (2) grounds. In Avitel, the debtors argued the share‑subscription contract was insufficiently stamped under Indian law, but the Bombay HC, and ultimately the Supreme Court, rejected this as a bar to enforcement. Unless the procedural formalities are so egregiously violated as to invalidate the arbitration agreement itself, technical irregularities will not usually impede enforcement.

Practical Impact and Drafting Considerations

17. The evolving Indian law has made enforcement of foreign commercial awards increasingly reliable. For Indian companies, this means that if they obtain foreign awards, Indian courts will generally honour them barring narrow exceptions thus increasing the confidence in business with the foreign company on the ground that foreign awards will be upheld.[10] The emphasis on minimal interference and seat-competence encourages confidence in international arbitration. On the other hand, losing parties in arbitration must recognize that protracted “guerrilla” litigation will be disfavoured.[11] The courts’ imposition of heavy costs (as in Vijay Karia) and pointed rebukes (as in Avitel) indicate that dilatory tactics will be penalized.

18. To maximize enforceability, contracting parties should draft arbitration clauses with caution and care. Key considerations include: choosing a neutral seat and applicable law, expressly clarifying which provisions of the Arbitration Act apply, and addressing interim relief. If avoidance of Indian intervention is desired, they might expressly waive Section 9.[12] [13] [14] The clause should also name the law governing the agreement and confirm the scope of arbitrable disputes. Ensuring the contract complies with Indian formalities such as proper stamping, etc. and avoids technical defences. In cross-border contracts, it is prudent to have an arbitration agreement in a form that meets Indian requirements, that includes written record and is in no conflict with public policy at formation.

19. Finally, parties should be aware of enforcement logistics. A foreign claimant should promptly apply in the correct High Court and be ready to submit the required documents and translations.[15] An Indian respondent should present any objections under Section 48 early and with clear proof (e.g. evidence of fraud).[16] Given Section 48’s discretionary language (“may refuse”), courts sometimes have restored awards despite technical objections.[17] Thus, strategic considerations include preparing for limited appeals and potential security requirements.

Conclusion

20. In sum, Indian law now adopts a strongly pro-enforcement stance toward foreign commercial awards. The Arbitration Act’s Part II (as amended in 2015 and 2019) and recent Supreme Court jurisprudence make clear that enforcement will be refused only on strictly limited grounds – essentially fraud, corruption, or violation of fundamental national policy/morality. Landmark decisions (Renusagar, Shri Lal Mahal, Vijay Karia, Avitel) uphold this narrow reading of “public policy”. The Avitel ruling, in particular, reinforces minimal court interference and emphasizes that challenges such as arbitrator bias must meet a high threshold. At the same time, practical hurdles like delay, parallel litigation, or interim disputes, require vigilance. Indian companies and foreign investors alike must plan thoughtfully: drafting clear arbitration clauses, understanding Section 48’s contours, and diligently prosecuting or defending enforcement actions. With recent reforms and jurisprudence, India’s enforcement regime now aligns closely with global norms, enhancing predictability for cross-border commerce.

---

[1] Abdul Haseeb is a Fourth Year Law Student, at Dr. Ram Manohar Lohiya National Law University, Lucknow

[2] Booz-Allen & Hamilton Inc v. Sbi Home Finance Ltd, AIR 2011 SC 2507.

[3] National Agricultural Cooperative v. Alimenta S.A., AIR 2020 SUPREME COURT 2681.

[4] Oil and Natural Gas Corporation Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705.

[5] Swiss Timing Ltd v. Organizing Committee Commonwealth, AIR 2014 SUPREME COURT 3723.

[6] A. Ayyasamy v. A. Paramasivam & Ors,, AIR 2016 SC 4675.

[7] Avitel Post Studioz Ltd. & Ors. v. HSBC PI Holdings (Mauritius) Ltd., 2024 7 SCC 197.

[8] Indian Oil Corporation Ltd. v. SPS Engineering Ltd., (2011) 3 SCC 507.

[9] Vijay Karia v. Prysmian Cavi E Sistemi SRL, (2020) 11 SCC 1.

[10] Agrud Partners, Enforcement of Foreign Arbitral Awards in India: A Guide, Agrud Partners (May 9, 2025), https://agrudpartners.com/enforcement-of-foreign-arbitral-awards/ (last visited Sept. 06, 2025).

[11] Ahuja, N.G. (2022). Mechanisms to Control Guerrilla Tactics in International Arbitration. In: Taming the Guerrilla in International Commercial Arbitration. International Law and the Global South. Springer, Singapore. https://doi.org/10.1007/978-981-19-0075-4_5.

[12] As in Bhatia International v. Bulk Trading S.A. [AIR 2002 SC 1432] the Supreme Court took a purposive (holistic) approach and held that Part I could, in certain circumstances, be applied to international arbitrations even if the seat/place was outside India, unless the parties had expressly excluded Part I. Bhatia effectively allowed Indian courts significant supervisory jurisdiction over some foreign-seated arbitrations.

[13] Bharat Aluminium Co. v. Kaiser Aluminium Technical Servs.[Civ App 3678 of 2007 (6 September 2012)] overruled Bhatia International (prospectively) on the specific point of territorial application: the Court held that Part I of the Act does not apply to arbitrations whose seat/place is outside India; the seat (place) of arbitration is the key territorial touchstone (the “centric of gravity”), and judicial powers under Part I are territorially limited. Consequently, applications under Part I (including s.9) are not maintainable in India in relation to foreign-seated arbitrations. BALCO thus restored a strict territorial approach in line with the Model Law.

[14] Raffles Design International v. Educomp [2016 SCC OnLine Del 5521] held that after the 2015 Amendment, Section 9 can be invoked in relation to foreign-seated arbitrations unless there is an agreement to the contrary. The Court recognised that emergency/EA awards from a foreign seat may not be directly enforceable in India but that an Indian court could nonetheless grant interim relief under sec 9. (Usefully illustrates how Indian courts interpret the proviso liberally to allow interim relief.)

[15] Bank of Baroda v. Kotak Mahindra Bank Ltd., 2020 SCC OnLine SC 324.

[16] Perfint Healthcare Pvt. Ltd. v. California Institute, 2019 SCC OnLine Mad 1.

[17] The Branch Manager, Magma Leasing and Finance Limited and Anr. v. Potluri Madhavilata and Anr, MANU/SC/1672/2009.