Introduction
The decision of the Hon’ble Supreme Court in Nagaraj V Mylandla v. PI Opportunities Fund-I and Ors.[i](hereinafter referred to as “Mylandla”) is a landmark doctrinal development ruling in the Indian foreign arbitral award enforcement regime. The judgement clarifies on a significant issue in arbitration that is, whether a defeated party can evade unfavourable arbitral award and decisions of the seat court by repackaging them as objections under the exception of public policy in Section 48(2)(b)[ii] of the Arbitration and Conciliation Act, 1996.[iii] The conflict stemmed from a failed exit mechanism between the promoters of Financial Software and Systems Pvt. Ltd. (“FSSPL”) and its foreign investors which resulted in an arbitral award that was upheld by the Singapore High Court. The said decision of Singapore High Court was not challenged by the award debtors; however, the arbitral award was opposed at the enforcement stage in India.
The substance of the controversy was the attempt by the award-debtors to reagitate a factual question: Whether the transaction in effect constituted an impermissible buy-back under Indian law, as a contravention of an Indian fundamental public policy? This effort was unsuccessful and the Supreme Court rejected it and recognized the doctrine of transnational issue estoppel. The Supreme Court held that factual matters settled by a competent court at the seat of arbitration cannot be reopened during enforcement.
Doctrinal Contribution: Recognition of Transnational Issue Estoppel
The greatest contribution of the judgment is the recognition of a systematic framework of application of transnational issue estoppel. The Court adopting from the case of Republic of India v. Deutsche Telekom AG[iv] laid down four fundamental conditions:
“65.(1) that the judgment must be given by a foreign court of competent jurisdiction;
(2) It must be final and conclusive on merits;
(3) There must be identity of parties, and
(4) There must also be identity of subject matter”
All these conditions ensure that factual decisions by the courts of the seat are final and cannot be retried in different jurisdictions, where enforcement has been sought.
Factually speaking, the award-debtors had striven to revive a factual argument which had been dismissed by the Singapore High Court by re-packaging it as a legal objection under the Indian company law and public policy. However, the Court rejected the “coloured transformation” of disputes. The Supreme Court dealt the issue through a two-step analytical model, first addressing as to whether the matter of same nature is raised before enforcing court in India which was determined by the seat court. The Court having answered the first question in affirmative proceeded to consider whether any independent ground under Section 48 was made out. In this context, the Supreme Court clarified that Section 48 cannot be used to reopen or re-agitate issues that have already been conclusively decided, and can only be invoked where a genuine and independent question arises within the limited grounds of refusal under the provision.[v]
This reasoning is doctrinally significant as it clarifies that the issue estoppel and public policy exist at different conceptual levels, while the former aims for procedural finality and the latter protects substantive justice. The Court essentially limited the extent of opposition to enforcement without undermining India’s policy concerns.
Strengthening India’s Pro-Enforcement Framework
The judgement strengthens the pro-enforcement stance of India on arbitration law in several ways. The Court reiterates that it has consistently held in previous jurisprudence that enforcement courts are not to act as appellate courts and re-review the merits of an arbitral award. This improves predictability in enforcement and avoids inconsistency between jurisdictions, in line with principle of comity. Additionally, by ensuring that factual findings made by the courts of the seat are not interfered with at the enforcement phase, the decision reinforces the principle of finality. This is especially important for transnational setting where various jurisdictions gets entangled at various stages of arbitral process. The Court restricts the range of objections under the Section 48 to make the Indian law consistent with the pro-enforcement bias of the New York Convention.[vi]
Further, the Court imposed costs amounting to Rs.25 lakhs indicating the Court’s intolerance towards dilatory practices and manipulation of the enforcement process, thus deterring parties to participate in unnecessary and unwarranted litigation.
Unresolved Questions
Although intelligible in terms of doctrine, the judgment leaves a number of significant questions unanswered, which may shape the future orientation of Indian arbitration law.
Absence of Manifest Injustice Exception
While the Court does not apply transnational issue estoppel absolutely, it fails to establish a clear exception from the operation of issue estoppel in cases of fraud, irregularity or injustice. It is interesting to note that the Court acknowledges that issue estoppel must ‘work justice and not injustice’ and that it would work flexibly, being denied in ‘special circumstances’ where its application would cause injustice, relying on the principle enunciated in Carl Zeiss Stiftung v Rayner & Keeler Ltd.[vii] But the Court does not translate this statement into a specific exception.[viii] The jurisprudence from other countries, particularly Singapore,[ix] accepts that estoppel does not operate where to do so would be grossly inequitable, a proposition that has been gestured at rather than formally detailed in the Mylandla.
The absence of a formally articulated exception in Mylandla risks rendering the doctrine insufficiently certain in its application. The Court’s acknowledgement of the ‘special circumstances’ qualification, without defining its contours, leaves open the question of when and how such circumstances would be invoked. Parties may be permanently prevented from raising legitimate claims that were not sufficiently addressed at the seat, without clearly defined exception to guide enforcement courts. This raises concerns about fairness as the doctrine, absent a structured safety-valve, may serve to entrench incorrect or unjust findings instead of simply promoting finality
Silence on the Primacy Principle
The second weakness of the ruling is that it does not address the principle of primacy. This principle means that the seat court’s decisions are usually given primacy, particularly when the stricter requirements of issue estoppel are not met. This is because the seat court has primary supervisory power over the arbitration.
In failing to address this principle, the Court creates a loophole. This enables parties to bring new arguments to the enforcement court that they could have argued before the seat court. They can then avoid the estoppel effect, without undermining the finality of the arbitral process. The recognition of primacy would have improved the reasoning and limited the prospect of such tactics.
The Asymmetry Problem
Indian courts have consistently held that enforcement proceedings are separate from annulment proceedings at the seat, and that a foreign award being set aside abroad does not automatically bar its enforcement in India. In Government of India v. Vedanta Ltd,[x] the Supreme Court clarified that while annulment at the seat is a ground to refuse enforcement under Section 48, it is not binding, and Indian courts retain independent discretion to assess enforceability. This position reflects that enforcement jurisdiction, though secondary, is not subordinate to the seat court. In Venture Global Engineering LLC v. Satyam Computer Services Ltd,[xi] the Court had even intervened in foreign awards (a position later limited by BALCO v. Kaiser Aluminium[xii]). Despite the post-BALCO framework narrowing such intervention, the principle remains that annulment is only a permissive, not mandatory ground to refuse enforcement under Section 48(1)(e).
However, the Court, in the present ruling, considers only a case where the arbitral award is upheld by the seat court and does not take into consideration an opposite case where the award has been set aside. The recognition of the transnational issue estoppel begs a very important question here; is the doctrine operative symmetrically? When a seat court overturns an award, does that bind Indian courts on its finding, or does it leave them to determine independently whether an award is enforceable under Section 48? There is no clarity on this matter which is a significant gap in the doctrine and creates uncertainty for future cases.
India in the Global Enforcement Landscape
Mylandla’s significance extends beyond its immediate facts placing India within the broader global framework governing the enforcement of foreign arbitral awards. Various jurisdictions have adopted different approaches to this. The English courts have long been careful to apply issue estoppel, especially when there are issues of public policy involved as observed in the case of Arnold v. National Westminster Bank Plc.[xiii] However, the French courts have taken the more liberal approach, enforcing the awards as a near-absolute rule despite being set aside at the seat, subject only to the narrow exception of manifest violation of French international public policy.[xiv] As a middle ground, Singapore acknowledges transnational issue estoppel, but also formulates the principle of primacy to strengthen the primacy of the seat court.[xv] Mylandla seems to thrust India in this mid-way, but without defining its outlines.
This transition is accompanied by an interesting institutional irony. Before the Singapore Court of Appeal in Deutsche Telekom v. India,[xvi] it was India that objected to the application of transnational issue estoppel on the ground that the doctrine did not operate to bar it from re-litigating jurisdictional challenges already rejected at the seat. The Court nonetheless applied the doctrine against India. Now, in Mylandla, India’s own Supreme Court has, for the first time, formally recognised and applied the same doctrine. This implies that India is a transitional jurisdiction, progressive in its pro-enforcement orientation, but still evolving in its doctrinal execution.
The Way Forward
Some reforms are necessary to consolidate the gains of Mylandla. First, the doctrine of transnational issue estoppel ought to be officially entrenched in the statutory framework governing enforcement, ideally by way of an explanation to Section 48 which reflects the four-part test established by the Court. This would improve clarity and limit the opportunities to apply the law inconsistently.
Second, a narrow exception to the doctrine should be identified by the law in situations of fraud, procedural unfairness or manifest injustice. This is an exception that would guarantee that the doctrine is not applied in an unduly inflexible way and would be more consistent with the competing values of finality and fairness.
Conclusion
The ruling in Mylandla is a bold move in the arbitration jurisprudence of India. The Supreme Court has made a considerable contribution to the finality of arbitral awards by refusing to repackage disputes of fact as objections to public policy and by acknowledging the binding effect of determinations made by the seat courts.
At the same time, the decision does not entirely ease out the tension involved in the enforcement system. The lack of a manifest injustice exception, lack of interaction with the primacy principle and the unresolved asymmetry in set-aside award cases is an indication that the doctrinal architecture is incomplete. Mylandla can however be perceived not as the culmination of the pro-enforcement course taken in India, but as a foundational one, one that predetermines the further evolution of judicial and legislative processes in this field.
[i] Nagaraj V Mylandla v PI Opportunities Fund-I and Ors SLP 31945–47 of 2025.
[ii] Arbitration and Conciliation Act 1996 (India), s 48(2)(b).
[iii] Arbitration and Conciliation Act 1996.
[iv] Republic of India v Deutsche Telekom AG [2023] SGCA(I) 10.
[v] Nagaraj v. Mylandla v. PI Opportunities Fund-I and Ors., SLP (C) Nos. 31945–47 of 2025, ¶ 65-67.
[vi] ‘The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards’ (New York Arbitration Convention, 1958) <https://www.newyorkconvention.org/\> accessed 5 April 2026.
[vii] Carl Zeiss Stiftung v Rayner & Keeler Ltd. [1967] 1 AC 853 (HL).
[viii] Nagaraj v. Mylandla v. PI Opportunities Fund-I and Ors., SLP (C) Nos. 31945–47 of 2025, ¶ 64.
[ix] Sundaresh Menon CJ, ‘Paper Delivered at the 8th Judicial Seminar on Commercial Litigation’ (Judiciary of Singapore) <https://www.judiciary.gov.sg/news-and-resources/news/news-details/chief-justice-sundaresh-menon–paper-delivered-at-the-8th-judicial-seminar-on-commercial-litigation\> accessed 5 April 2026.
[x] Government of India v. Vedanta Ltd. AIR 2020 Supreme Court 4550.
[xi] Venture Global Engineering LLC v. Satyam Computer Services Ltd. AIR 2010 Supreme Court 3371.
[xii] Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552.
[xiii] Arnold v National Westminster Bank Plc [1991] 2 AC 93 (HL).
[xiv] Code de procédure civile (France), art 1520 <https://french-business-law.com/french-legislation-art/article-1520-of-the-french-code-of-civil-procedure/\> accessed 5 April 2026.
[xv] The Republic of India v. Deutsche Telekom AG, [2023] SGCA(I) 10 (Singapore Court of Appeal); Transnational Issue Estoppel in International Commercial Arbitration’ (Jus Mundi) https://jusmundi.com/en/document/publication/en-transnational-issue-estoppel-in-international-commercial-arbitration accessed 26 April 2026.
[xvi] The Republic of India v Deutsche Telekom AG [2023] SGCA(I) 10.
Author(s)
Muskan Jain
Student at Rajiv Gandhi National University of Law, Punjab