1. Investment dispute involving contractual exit mechanisms between private equity investors and company promoters, following failed public offering and subsequent arbitration proceedings seeking enforcement of a foreign award. (Para 1 , 2 , 3 , 4 , 5 , 12 , 13 , 14 )
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2026 Supreme(SC) 324
SUPREME COURT OF INDIA
SANJAY KUMAR, K. VINOD CHANDRAN, JJ.
Nagaraj V. Mylandla – Appellant
Versus
PI Opportunities Fund-I and Others – Respondents
Special Leave Petition (Civil) Nos. 31866-31868 of 2025, Special Leave Petition (Civil) Nos. 31945-31947 of 2025
Decided On : 25-03-2026
Advocates appeared:
For the Petitioner(s): Mr. Gopal Subramanian, Sr. Adv. Mr. Anirudh Krishnan, Adv. Mr. Mahesh Agarwal, Adv. Mr. Ashish Kabra, Adv. Mr. Nishant Kadur, Adv. Mr. Ansh Desai, Adv. Ms. Madhavi Agrawal, Adv. Ms. Gauri Subramanium, Adv. Mr. Uday Aditya Jetley Pocha, Adv. Mr. Jayavardhan Singh, Adv. Mr. Pavan Bhushan, Adv. Mr. Adnan Yousef, Adv. Mr. Adarsh Subramanian, Adv. Mr. Anuraag Rajagopalan, Adv. Mr. Nivethithaa.s, Adv. Mr. E. C. Agrawala, AOR
For the Respondent(s):Mr. Rajendra Barot, Adv. Mr. Prabhav Shroff, Adv. Ms. Mrudula Dixit, Adv. Mr. Naman Nayyar, Adv. Ms. Aditi Nazre, Adv. Ms. Shivam Jain, Adv. Mr. Shivam Jain, Adv. Ms. Sia Ganju, Adv. Mr. Abhijnan Jha, AOR Mr. Shyam Divan, Sr. Adv. Mr. Suhrith Parthasarathy, Adv. Ms. Rashmi Nandakumar, AOR Ms. Rhia Marshall, Adv. Ms. Amritha Sathyajith, Adv. Ms. Yashmita Pandey, Adv. Mr. Ankur Singhal, Adv. Mr. Rongon Choudhary, Adv. Dr. Abhishek Manu Singhvi, Sr. Adv. Mr. Ritin Rai, Sr. Adv. Mr. Anuj Berry, Adv. Ms. Shalaka Patil, Adv. Ms. Anusha Ramesh, Adv. Mr. Utkarsh Srivastava, Adv. Ms. Shilpa Sengar, Adv. Ms. Gauri Pasricha, Adv. Mr. Harsh Khanchandani, Adv. Mr. Daksh Kadian, Adv. Mr. Amit Bhandari, Adv. M/s. Trilegal Advocates On Record, AOR Mr. Anush Raajan, AOR Mr. Balaji Srinivasan, AOR Mr. Vishwaditya Sharma, Adv. Ms. Kanishka Singh, Adv. Ms. Harsha Tripathi, Adv. Mr. Subornadeep Bhattacharjee, Adv. Ms. Suganya T.s., Adv. Mr. Parikshit Pitale, Adv. Mr. K. Shiva, Adv. Mr. Rohan Dewan, Adv. Ms. Aakriti Priya, Adv. Ms. Garima Jain, Adv. Ms. Lakshmi Rao, Adv. Mr. S. Eshwar, Adv. Mrs. Aanchal M. Niching, Adv.
For the Petitioner(s): Mr. Gopal Subramanian, Sr. Adv. Mr. Anirudh Krishnan, Adv. Mr. Mahesh Agarwal, Adv. Mr. Ashish Kabra, Adv. Mr. Nishant Kadur, Adv. Mr. Ansh Desai, Adv. Ms. Madhavi Agrawal, Adv. Ms. Gauri Subramanium, Adv. Mr. Uday Aditya Jetley Pocha, Adv. Mr. Jayavardhan Singh, Adv. Mr. Pavan Bhushan, Adv. Mr. Adnan Yousef, Adv. Mr. Adarsh Subramanian, Adv. Mr. Anuraag Rajagopalan, Adv. Mr. Nivethithaa.s, Adv. Mr. E. C. Agrawala, AOR
For the Respondent(s):Mr. Rajendra Barot, Adv. Mr. Prabhav Shroff, Adv. Ms. Mrudula Dixit, Adv. Mr. Naman Nayyar, Adv. Ms. Aditi Nazre, Adv. Ms. Shivam Jain, Adv. Mr. Shivam Jain, Adv. Ms. Sia Ganju, Adv. Mr. Abhijnan Jha, AOR Mr. Shyam Divan, Sr. Adv. Mr. Suhrith Parthasarathy, Adv. Ms. Rashmi Nandakumar, AOR Ms. Rhia Marshall, Adv. Ms. Amritha Sathyajith, Adv. Ms. Yashmita Pandey, Adv. Mr. Ankur Singhal, Adv. Mr. Rongon Choudhary, Adv. Dr. Abhishek Manu Singhvi, Sr. Adv. Mr. Ritin Rai, Sr. Adv. Mr. Anuj Berry, Adv. Ms. Shalaka Patil, Adv. Ms. Anusha Ramesh, Adv. Mr. Utkarsh Srivastava, Adv. Ms. Shilpa Sengar, Adv. Ms. Gauri Pasricha, Adv. Mr. Harsh Khanchandani, Adv. Mr. Daksh Kadian, Adv. Mr. Amit Bhandari, Adv. M/s. Trilegal Advocates On Record, AOR Mr. Anush Raajan, AOR Mr. Balaji Srinivasan, AOR Mr. Vishwaditya Sharma, Adv. Ms. Kanishka Singh, Adv. Ms. Harsha Tripathi, Adv. Mr. Subornadeep Bhattacharjee, Adv. Ms. Suganya T.s., Adv. Mr. Parikshit Pitale, Adv. Mr. K. Shiva, Adv. Mr. Rohan Dewan, Adv. Ms. Aakriti Priya, Adv. Ms. Garima Jain, Adv. Ms. Lakshmi Rao, Adv. Mr. S. Eshwar, Adv. Mrs. Aanchal M. Niching, Adv.
Enforcement of a foreign arbitral award is upheld where the remedies sought by investors under the SASHA were clear, and the distinction between 'buy-back' and 'surrender' is recognized, avoiding violations of public policy.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 47-49 - Enforcement of foreign arbitral award - The High Court upheld the enforceability of an award under the Singapore International Arbitration Act, 1994, against the directors of a digital payment company due to a failure to provide an exit to investors per the Share Acquisition and Share Holders Agreement (SASHA). - The arbitral tribunal found material breaches by the directors, holding them liable for damages determined as of a specific date. (Paras 5-12, 30-36, 85)
(B) Public Policy - Enforcement - The argument that the enforcement would violate public policy due to a purported 'buy-back' of shares was rejected; the distinction between 'buy-back' and 'surrender' was affirmed. (Paras 81-82, 88)
(C) Remedies - The Investors’ right to seek a strategic sale or terminate promoters' rights was clarified, emphasizing no intention to take control of the company. (Paras 87-90)
(D) Costs - The petition was dismissed with costs of ₹25,00,000/- imposed on the petitioners. (Paras 92)
Judgement Key Points
Key Points: - Supreme Court upheld enforcement of Singapore-seated foreign arbitral award against directors of FSSPL for failing to provide exit to investors under SASHA (!) (!) - Arbitral tribunal awarded damages equivalent to exit price as of 18.09.2020, with joint and several liability on FSSPL and promoters (!) (!) - Distinction affirmed between 'buy-back' (company repurchase under Companies Act) and 'surrender' (shareholder's voluntary return), rejecting public policy violation claim (!) (!) (!) - Investors' termination of promoters' rights under Clause 24.6(c) treated as interim measure, falling away upon award of damages (!) (!) (!) - Doctrine of transnational issue estoppel applies to prevent relitigation of issues settled by seat court, except on public policy grounds unique to enforcement forum (!) (!) (!) - No violation of Specific Relief Act, 1963; strategic sale as alternative remedy only if damages unpaid, not specific performance (!) (!) (!) - Madras High Court order deeming award enforceable as decree confirmed; SLP dismissed with costs of ₹25,00,000/- on petitioners (!) (!) - Clause 19 of SASHA imposed absolute obligation on company/promoters to provide exit via secondary sale, buy-back, IPO, or strategic sale (!) (!) - Waiver defence rejected as no written waiver per Clause 29.5; participation in split sale discussions insufficient (!) (!) (!)
What is the distinction between 'buy-back' and 'surrender' of shares in the context of enforcing a foreign arbitral award? [p_81][p_82][p_88]
What remedies are available to investors upon a material breach under the SASHA? [p_10][p_14][p_76]
How does transnational issue estoppel apply to enforcement of foreign arbitral awards under Section 48 of the Arbitration Act? [p_57][p_75][p_76]
Legal Category Hierarchy
- arbitration law
- practice and procedure
- corporate law
Table of Contents
2. Promoters contested the enforcement of the arbitral award citing violations of Indian public policy, statutory restrictions on share buy-backs, and errors in the tribunal's interpretation of contractual remedies. (Para 26 , 29 , 40 , 41 , 42 )
3. The court emphasized minimal interference in foreign arbitral awards, rejecting re-adjudication of merits already settled by the seat court under the doctrine of transnational issue estoppel. (Para 38 , 56 , 57 , 76 , 79 )
4. Enforcement of a foreign arbitral award under the Arbitration and Conciliation Act is subject only to narrow grounds; once factual issues are settled by the seat court, they preclude re-litigation before the enforcement court. (Para 49 , 51 , 53 , 57 , 83 )
5. The Supreme Court dismissed the special leave petitions and upheld the enforceability of the foreign arbitral award, imposing costs on the parties seeking to delay the execution. (Para 39 , 91 , 92 )
6. What is the scope of 'public policy of India' as a ground for challenging the enforcement of a foreign arbitral award under the Arbitration Act?
Public policy of India is restricted to the fundamental policy of Indian law, which refers to core legal values not susceptible to compromise; it does not allow for a re-examination of the merits of a foreign award. (Para 27 , 52 , 53 , 55 , 56 )
7. Does the doctrine of 'transnational issue estoppel' prevent a party from re-litigating factual issues in enforcement proceedings after they were decided by the seat court?
Yes, transnational issue estoppel bars a party from re-litigating issues already settled by a competent seat court, aiming to promote finality and prevent the misuse of multiple legal forums for review. (Para 30 , 38 , 57 , 76 , 83 )
8. Is the surrender of shares as a condition for receiving awarded damages in contract enforcement equivalent to a share buy-back under the Companies Act?
No, a voluntary surrender of shares by a shareholder to facilitate an exit and avoid double recovery is legally distinct from a company's initiated share buy-back governed by the Companies Act. (Para 28 , 29 , 81 , 82 )
9. Does the enforcement court have the authority to re-interpret contract terms or assess factual findings that formed the basis of an arbitral tribunal's award?
No, an enforcement court lacks the jurisdiction to review the merits of a foreign arbitral award or re-interpret contractual terms, as the tribunal's plausible interpretation is generally immune from such review. (Para 26 , 29 , 38 , 79 , 84 )
JUDGMENT :
SANJAY KUMAR, J
1. Enforcement of a foreign arbitral award is in issue.
2. By common order dated 22.09.2025, a learned Judge of the High Court of Judicature at Madras held the award dated 05.07.2024 passed by a 3-member arbitral tribunal, under the aegis of the Singapore International Arbitration Act, 1994, and the Arbitration Rules of the Singapore International Arbitration Centre, to be enforceable and deemed it to be a decree under Section 49 of the Arbitration and Conciliation Act, 1996.1 [For short ‘the Arbitration Act’]. He, accordingly, passed a decree in terms of the said award against Nagaraj V. Mylandla and Sharada Mylandla2 [For short and collectively ‘the Mylandlas’] the directors of Financial Software and Systems Private Limited3 [For short ‘FSSPL’] Chennai. Aggrieved thereby, the Mylandlas filed this batch of special leave petitions.
3. The impugned common order dated 22.09.2025 was passed in Arbitration O.P. (Comm. Div.) Nos. 285, 452 and 453 of 2024. These three petitions were filed by PI Opportunities Fund-I, Bangalore; Millenna FVCI Limited (formerly, NEA FVCI Limited), Mauritius; and lastly, NYLIM Jacob Ballas India (FVCI) III LLC along with NYLIM Jacob Ballas India Fund III LLC, Mauritius, under Sections 47 to 49 of the Arbitration Act, seeking a declaration that the arbitral award dated 05.07.2024 passed in SIAC Arbitration No. 098 of 2022 is enforceable; to deem it to be a decree of the Court; and, consequently, direct respondent Nos. 2 and 3 therein, viz. the Mylandlas, to jointly and severally pay the awarded damages, interest, and costs. Other directions were also sought in furtherance thereof.
THE FACTS
4. We may now note the underlying facts: FSSPL is a digital payment services company. It has two business divisions - CashTech and PayTech. The Mylandlas and Rudhraapathy J, respondent No. 4, are its promoters. FSSPL’s business activities involve providing online, real time, electronic transaction processing and payment systems, including Automated Teller Machines (ATMs), Point of Sale terminals (PoS), ATM sharing between banks, international and domestic interchanges, such as Mastercard, Visa and others. Earlier, the promoters of FSSPL collectively held 48.9% of its share capital. While so, PI Opportunities Fund-I; Millenna FVCI Limited (formerly, NEA FVCI Limited); NYLIM Jacob Ballas India (FVCI) III LLC along with NYLIM Jacob Ballas India Fund III LLC (hereinafter, collectively referred to as ‘the Investors’ and individually as ‘PIOF’, ‘Millenna’ and ‘Nylim I & II’ respectively) made substantial investments in FSSPL and acquired shares therein through an agreement dated 10.10.2014, titled Share Acquisition and Share Holders Agreement.4 [For short ‘the SASHA’]
THE SASHA
5. We may note the relevant details of the SASHA at this stage. It was entered into by FSSPL; its promoters, viz. the Mylandlas and Rudhraapathy J.; and the FSS Employees’ Welfare Trust, with the Investors. It recorded that, as on the closing date, the promoters held 40.4% and the Employees’ Trust held 6.52% of the share capital of FSSPL while the Investors were allotted shares on a fully diluted basis - PIOF was allotted 20.14% shareholding while Millenna was given 18.97% shareholding and Nylim I & II were to hold 12.65% of the shareholding together. Other shareholders held the remaining 1.32% shareholding.
6. Clause 19 of the SASHA is titled ‘Exit’ and posited that FSSPL and its promoters would make efforts to ensure that a Qualified Initial Public Offering (QIPO) occurs on or prior to the cut-off date, viz. 31.03.2016. If that did not occur, then an exit waterfall was made available to the Investors under Clauses 19.1, 19.2, 19.3 and 19.6. Under Clause 19.1, if the QIPO was not completed by the cut-off date, each Investor was to decide whether it would participate in a ‘secondary sale’ and, if so, deliver a notice to FSSPL and the promoters informing them of such decision, requiring FSSPL and the promoters to find a buyer f
