In a significant ruling delivered by Justice Sanjay Kumar on 31 March 2026, the Supreme Court of India dismissed the special leave petitions filed by Nagaraj V. Mylandla and Sharada Mylandla (promoters of Financial Software and Systems Private Limited – FSSPL) against the Madras High Court’s order enforcing a Singapore International Arbitration Centre (SIAC) award dated 05.07.2024.
The award, passed under the Singapore International Arbitration Act, 1994 and SIAC Rules, arose from a Share Acquisition and Shareholders Agreement (SASHA) dated 10.10.2014 between FSSPL’s promoters and a group of foreign investors (PI Opportunities Fund-I, Millenna FVCI Limited, and NYLIM Jacob Ballas entities). The Investors had injected substantial capital into FSSPL, a digital payments company with CashTech and PayTech divisions, acquiring over 51% shareholding on a fully diluted basis.
The core dispute centred on the “Exit” clause (Clause 19) of the SASHA. When a Qualified IPO did not materialise by the cut-off date of 31.03.2016, the Investors invoked secondary sale, material breach, and strategic sale provisions after years of delay. The three-member arbitral tribunal unanimously held that the promoters and FSSPL had committed material breaches by failing to provide an exit. It awarded damages equivalent to the “Exit Price” as on 18.09.2020 (totalling approximately ₹11,288 million across the Investors), simple interest at 5.33% p.a., and costs. In the alternative, if damages remained unpaid within 90 days, the Investors were entitled to enforce a strategic sale of shares under Clause 19.6(b), with promoters and employee shareholders required to participate on non-inferior terms.
The arbitral tribunal’s award was challenged by the Mylandlas before the Singapore High Court, which dismissed the set-aside application on 21.02.2025. The Investors then sought enforcement before the Madras High Court under Sections 47–49 of the Arbitration and Conciliation Act, 1996. The Madras High Court, by a common order dated 22.09.2025, declared the award enforceable and deemed it a decree of the court, directing the Mylandlas to pay the awarded sums jointly and severally.
Before the Supreme Court, the Mylandlas raised multiple objections under Section 48, primarily alleging violation of India’s public policy. They argued that the award effectively amounted to an impermissible buy-back of shares under Sections 66–68 of the Companies Act, 2013; involved an impermissible election of remedies (strategic sale vis-à-vis termination of promoters’ rights); violated the Specific Relief Act, 1963; and suffered from waiver, unauthorised delegation, and even fraud due to alleged concealment of documents.
The Supreme Court firmly rejected every contention. It emphasised the narrow scope of public policy review under Section 48, reiterating the principles laid down in Vijay Karia v. Prysmian Cavi E Sistemi SRL (2020) 11 SCC 1. The Court held that the award did not direct any buy-back by FSSPL; it merely awarded damages for breach of the absolute obligation under Clause 19.1, with an undertaking by the Investors to surrender shares upon payment to avoid double recovery. This was distinct from the contractual buy-back option under Clause 19.2.
The Supreme Court applied the doctrine of transnational issue estoppel, noting that most issues had already been argued and rejected by the seat court (Singapore High Court). It described the SLPs as a “mudslinging effort” and a last-ditch attempt to re-litigate the merits in the enforcement jurisdiction. The Court observed that enforcement proceedings are not a de novo trial and parties cannot introduce fresh evidence or arguments that could have been raised earlier.
On the election-of-remedies issue, waiver, Specific Relief Act, and other grounds, the Supreme Court held that the arbitral tribunal’s interpretation of the carefully drafted SASHA was plausible and did not contravene the fundamental policy of Indian law. It also took note of the Mylandlas’ failure to pay their share of arbitration costs, which the Investors ultimately bore.
In the operative order, the Supreme Court dismissed the special leave petitions and imposed further costs of ₹25,00,000/- on the Mylandlas, payable jointly and severally.
Key Takeaways for Businesses and Arbitration Practitioners
This judgment reinforces India’s pro-enforcement bias towards foreign arbitral awards. It sends a clear message that challenges at the enforcement stage must meet an extremely high threshold and cannot be used as a second bite at the cherry after the seat court has ruled. Parties entering into cross-border investment agreements with exit clauses should take note: failure to honour contractual exit mechanisms can lead to substantial damages awards that Indian courts will readily enforce, even against promoters personally.
The ruling also underscores the importance of the seat court’s decision and the limited role of Indian enforcement courts, promoting finality and predictability in international arbitration — a critical factor for foreign investors in India.
Case Details: Nagaraj V. Mylandla versus PI Opportunities Fund-I and others Etc. | 2026 INSC 298
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