LAST MONTH, the Supreme Court published its judgment in Nagaraj V. Mylandla v. PI Opportunities Fund. The case arose from a special leave petition against Madras High Court’s judgement in PI Opportunities Fund – I v. FSSPL (2025) which had allowed the enforcement of an international arbitration award against the appellant award debtor. While the Supreme Court’s judgment upholding the Madras High Court’s judgment, and thereby allowing the enforcement of the award, was broadly anticipated. In doing so, the Court for the first time recognised the doctrine of transnational issue estoppel under Indian law. This is a notable development as it strengthens India’s stated pro-arbitration policy approach.
Background
The dispute in this case arose out of a share acquisition and shareholders’ agreement (‘SASHA’) between the promoters of Financial Software and Systems Pvt. Ltd. (‘FSSPL’), its promoters, the Mylandlas, and a group of private equity investors (PIOF, Millenna, and NYLIM entities). The agreement contained a detailed exit waterfall (‘Clause 19’), requiring the company and promoters to provide investors an exit through a Qualified Initial Public Offering, failing which through a secondary sale, buy-back, Initial Public Offering, or ultimately a strategic sale, that would force the promoters to part with their shares. When no exit materialised despite repeated notices – including secondary sale notices from 2016 onwards – the investors alleged material breach of the exit obligations and invoked their contractual rights, including the right to pursue a strategic sale.
In an arbitration seated in Singapore, the investors claimed (i) damages equivalent to the contractual ‘exit price’ for failure to procure a secondary sale, and (ii) enforcement of their right to a strategic sale. The tribunal held that Clause 19 imposed an absolute obligation to provide an exit and awarded damages for the promoters’ breach pegged to the exit price (valued as of September 2020). It further ruled that if the damages were not paid within 90 days, the investors could proceed with a strategic sale, with the promoters required to cooperate.
The award was unsuccessfully challenged by the promoters before the Singapore High Court (the seat court), which rejected the natural justice and buy-back objections. The investors then sought enforcement in India. The Madras High Court enforced the award as a decree, while rejecting public policy objections (including arguments that the award amounted to an impermissible buy-back or violated the Specific Relief Act, 1963) and also invoking transnational issue estoppel.
The Madras High Court’s judgment was appealed to the Supreme Court which not only upheld the judgment of the Madras High Court, but also expounded on the scope of transnational issue estoppel.
Discussion on issue estoppel under Indian Law
Drawing on precedents such as Hope Plantations Ltd. v. Taluk Land Board (1998) and Bhanu Kumar Jain v. Archana Kumar (2004), the Supreme Court explained that issue estoppel, much like res judicata, is a facet of the broader doctrine of public policy and justice under Indian law. Once a specific issue of fact or law has been directly raised and finally decided between the same parties, it cannot be re-agitated in subsequent proceedings, even if the cause of action differs. Extending this principle to the context of international arbitration, the Court endorsed ‘transnational issue estoppel,’ holding that issues already decided by the seat court or those that ought to have been raised there cannot be reopened at the enforcement stage under Section 48 of the Arbitration and Conciliation Act, 1996.
Discussion of international case and literature
This judgment has done a good job of encapsulating the principles of transnational issue estoppel through international case law and academic literature. However, an expansive discussion of the same is out of the remit of this column. Still, a couple of international case law references made by the Supreme Court are worth mentioning.
In Good Challenger Navegante S.A. v. Metalexportimport S.A.,(2003) the English Court of Appeal opined that, in order to establish ‘issue estoppel’, four conditions must be satisfied, namely: (i) that the judgment must be given by a foreign court of competent jurisdiction; (ii) that the judgment must be final and conclusive and on the merits; (iii) that there must be identity of parties; and (iv) that there must be identity of subject matter.
The Supreme Court heavily drew from the case of the Singapore Court of Appeal in Republic of India v. Deutsche Telekom AG (2023). The case was India’s challenge to the enforcement of the investment arbitration award against it in the aftermath of the ISRO-Devas fiasco. The Swiss seat court has refused to set aside the award on India’s challenge and allowed enforcement.
The Supreme Court cited the Singapore Chief Justice’s summation of the exceptions to the doctrine of ‘transnational issue estoppel’, as recognized in Merck Sharp & Dohme Corp v. Merck KGaA (2021):
i. Transnational issue estoppel should not apply to issues that the forum court must determine under its own law.
ii. Its application must account for whether the foreign judgment is territorially limited.
iii. Greater caution is needed when applying it against a defendant, who did not choose the forum, as opposed to the plaintiff who did.
iv. It will not apply where the foreign judgment conflicts with the forum’s public policy or is manifestly perverse or seriously erroneous.
The Singapore Court of Appeal noted that under the New York Convention, the country in which, or under whose arbitration law, the award is made has primary jurisdiction, while all other signatory States are secondary jurisdictions limited to deciding enforcement. Courts at the seat may apply their domestic law to annul or set aside an award, whereas courts in secondary jurisdictions may refuse enforcement only on the Article V grounds. This position was echoed in TermoRio S.A. E.S.P. v Electranta S.P. (2007).
The Supreme Court then went on to cite Hulley Enterprises Ltd v. Russian Federation (2025) where the English Court of Appeal observed with reference to Carl Zeiss Stiftung v. Rayner and Keller Ltd. (No.2) (1967) that there are three before applying ‘issue estoppel’-
i. The judgment must be given by a Court of a foreign country with the jurisdiction to give it; and it must be final and conclusive on merits.
ii. The parties in the two actions must be the same; and
iii. The issue decided by the foreign Court must be the same as the issue in the domestic proceedings.
How the Court applied transnational issue estoppel
Endorsing and drawing from the above cited international precedents, Para 76 of the Supreme Court’s judgment explains the functional purpose of transnational issue estoppel in the enforcement framework. The Court notes that applying the doctrine helps prevent parties from re-litigating factual issues already settled by the seat court, merely because they are now before a different court in another jurisdiction. This, in turn, narrows the scope of interference available to the enforcement court and strengthens the finality of arbitral awards that have already been upheld at the seat.
At the same time, the Court clarifies that public policy objections stand on a different footing. Even where the seat court has upheld the award, the enforcement court may still examine it against its own public policy standards (ostensibly since the public policy is necessarily a forum connected issue). However, public policy cannot be used as a backdoor to revisit merits-based findings, which remain barred by transnational issue estoppel
The ISRO-Devas angle
It is interesting that the Supreme Court chose to cite the Singapore High Court’s judgment in Republic of India v. Deutsche Telekom AG, given how India staunchly opposes enforcement of the investment arbitration awards passed against it in the fallout of the ISRO-Devas fiasco. Notably, Indian law does not contain any mechanism to even entertain the enforcement of investment arbitration awards. India is neither a signatory to International Centre for Settlement of Investment Disputes convention, nor does it recognise investment arbitration awards as ’commercial’ for the purposes of the New York Convention which precludes their enforcement in India (as seen in cases like Union of India v. Vodafone Group PLC (2018)). Therefore, award creditors against India under BITs tend to pursue a global enforcement strategy and attach India’s sovereign assets overseas.
India has lost almost every litigation in foreign jurisdictions challenging the enforcement of the adverse Deutsche Telekom arbitration awards. However, even though transnational issue estoppel has been recognised by the Supreme Court of India, it is unlikely that the government will internalise this to stop contesting the enforcement of these awards in foreign jurisdictions and spending further millions of dollars on legal fees.
Separately, this is a moment of reflection for the Indian judicial system. The ICC commercial arbitration award arising from ISRO-Devas fiasco that granted $560 million to the Devas was set aside by the Delhi High Court (Antrix Corporation v. Devas Multimedia Pvt. Ltd. (2022)).
However, despite the principle of transnational issue estoppel commanding such high deference to the decisions of the seat court, the setting aside of did not prevent foreign courts such as the Dutch Supreme Court from enforcing the award because the arbitration violated fundamental tenets of due process and fair hearing. One might infer that standards of due process may not always be applied consistently when the stakes are particularly high for the government as in the ISRO-Devas fiasco.
Conclusion
Given the propensity of Indian courts to permit extensive hearings – especially when regarded senior counsel are engaged – award-debtors resisting enforcement have often treated India as a second appellate forum for foreign awards. It is common for award debtors to repackage merits-based objections as ‘public policy’ violations in order to secure a de novo review. This 2026 decision in Nagaraj Mylandla brings Indian law closer in line with jurisdictions like Singapore and the UK by narrowing the scope for such repetitive challenges.
That said, even in the underlying Madras High Court judgment, the Court engaged in an examination of the objections raised, illustrating the practical difficulty of curbing this tendency entirely.
To the Supreme Court’s credit, while it undertook a substantive discussion of issue estoppel and recapped the history of the proceedings, it mostly refrained from delving into objections that fell outside the limited public policy framework. Going forward, the real test will be in its application. Transnational issue estoppel should not remain merely a doctrinal tool invoked in final judgments, but ought to be actively deployed at the hearing stage, enabling courts to shut down impermissible lines of argument early and conserve precious judicial time.
Until next time.
Anirudh Gotety is a commercial disputes and international arbitration lawyer based in New Delhi. He is a columnist at The Leaflet. He can be reached at anirudh@gotety.com.
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