JUDGMENT :

MANISH PITALE, J.

1. The respondents herein have launched a trenchant attack on the enforcement of a foreign arbitral award on the sole ground that it stands vitiated due to bias attributable to the Chairman of the arbitral tribunal, on account of his failure to disclose relevant information indicating identity of interests with the petitioner. It is specifically contended that by failing to disclose such information, the award is rendered incapable of enforcement, as it is contrary to the public policy of India. The respondents submitted that the likelihood of bias on the part of the Chairman of the arbitral tribunal, in the facts and circumstances of the present case, was of such a high degree that the failure to disclose in itself is a sufficient ground to decline enforcement of the arbitral award. It is claimed that the conditions necessary to demonstrate that the award is contrary to the public policy of India, under Section 48(2)(b) of the Arbitration and Conciliation Act, 1996 (Arbitration Act), are fully satisfied and that therefore, the present petition ought to be dismissed.

BRIEF FACTS:

2. The petitioner HSBC PI Holdings (Mauritius) Limited is a company incorporated under the laws of Mauritius. Respondent No. 1 Avitel Post Studioz Limited is a company incorporated under the laws of India and it is the parent company of Avitel Group. It holds entire issued share capital of Avitel Holdings Limited, which in turn, holds entire issued share capital of Avitel Post Studioz FZ LLC. Respondent No. 2 is the founder of Avitel Post Studioz Limited, being its Chairman and Director, while respondent Nos. 3 and 4 are his sons, who are directors of respondent No. 1.

3. A Share Subscription Agreement dated 21st April 2011, was executed between the petitioner and respondent No. 1, whereby the petitioner made an equity investment of about US$ 60 million in exchange of 7.8% shareholding in respondent No. 1. The agreement was completed on 6th May, 2011 and an amended/re-stated shareholders’ agreement, also dated 6th May, 2011, was executed as a condition of completion.

4. It is the case of the petitioner that during initiation, leading upto the said agreement, the respondent made certain representations to the petitioner, by stating that the investment made by the petitioner was required to service a significant contract which the respondent No. 1 was close to concluding with the British Broadcasting Corporation (BBC) of United Kingdom, further claiming that upon its conclusion, the contract would be serviced by Avitel Post Studioz FZ LLC. The total value of the contract with BBC was estimated to be US$ 1 to 1.3 billion. The petitioner further claims that it relied upon the representations, warranties and undertakings given by the respondent No. 1, while entering into the said agreement and invested about US$ 60 million. It was claimed that the respondents engaged in dishonest conduct, in order to induce the petitioner to make such investment. This included arranging a meeting between representative of the petitioner and a person, falsely held out by the respondents to be the Chief Technical Officer of the BBC, who in turn, falsely corroborated the misrepresentations of the respondents.

5. According to the petitioner, the respondents ceased to provide any information as regards the contract with BBC, post the investment made by the petitioner, despite numerous follow up attempts. It was learnt that Price Waterhouse Cooper had resigned as auditor of the Avitel Post Studioz FZ LLC on 8th February, 2012. At this stage, the petitioner engaged its own independent investigation agency, which gave rise to serious concern with regard to the legitimacy of the Avitel Post Studioz FZ LLC and its management. It was found that the said Avitel Post Studioz FZ LLC had shut down and it was not operating. It was further found that there was no relationship with BBC, leave alone any contract with it and that the monies invested by the petitioner wer