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INDIA 76
Supreme Court of India, 4 March 2024, Civil Appeal Nos. 3835 - 3836
(Avitel Post Studioz Limited et al. v. HSBC PI Holdings (Mauritius) Limited (previously named HPEIF Holdings 1 Limited))
INDIA 76
The Supreme Court agreed with the High Court that the appellants had failed to prove that the presiding arbitrator had been biased and that, as a consequence, enforcement of the award would violate public policy. The appellants argued that the presiding arbitrator had failed to disclose that he was an independent non-executive director of two companies that had business interactions with affiliates of the respondent. Applying the reasonable third-person test contained in the IBA Guidelines on Conflict of Interest in International Arbitration (adopted in the Indian Arbitration Act), the lower court had correctly concluded that there was no requirement of disclosure and no bias. The Court also stressed that the public policy defense under the New York Convention is to interpreted narrowly.
Award not binding, suspended or set aside: The court discusses the difference between the exclusive jurisdiction to set aside an award (primary jurisdiction), which belongs to the courts of the country of origin of the award, and the jurisdiction of all other courts to recognize and enforce the award (secondary jurisdiction); issues relating to the determination of the “competent authority”; and whether an award that has been set aside in the country of origin can be enforced in another State under the Convention.
Public policy: The court discusses the meaning of (international as compared to domestic) public policy, generally defined as the basic notions of morality and justice of the enforcement State.
Public policy: The court discusses the consequences of the apparent or actual bias of an arbitrator on the recognition and enforcement of an arbitral award.