Foreign arbitral award enforcement remains valid despite third-party forbearance agreements and international bankruptcy proceedings.

The Petitioner ("Award Holder"), a Spanish travel technology provider, entered into a Global Agreement with Respondent No. 1 ("Ebix Cash India") on 01.10.2019, with Respondent No. 2 ("Ebix Inc.") acting as a guarantor

The Petitioner advanced USD 15,000,001.50 as incentives, repayable if certain conditions, including the acquisition of Yatra Online Inc., were not met

Upon failure to meet these conditions, the Petitioner terminated the agreement and initiated ICC Arbitration

On 17.02.2022, the Arbitral Tribunal passed a foreign award holding the Respondents jointly and severally liable for approximately €13.26 million

Following partial recovery via enforcement proceedings in the US District Court and subsequent bankruptcy proceedings involving Respondent No. 2, the Petitioner sought recognition and enforcement of the remaining dues in India

The Respondents objected on grounds of limitation, public policy (Factoring Regulation Act), and the doctrine of election of remedies

Whether the petition was barred by limitation under Article 137 of the Limitation Act, 1963

Whether the enforcement of the Award was contrary to the "public policy of India" under Section 48(2)(b) due to alleged violations of the Factoring Regulation Act, 2011

Whether the Petitioner was barred from seeking enforcement in India under the doctrines of election of remedies or extinguishment of debt after pursuing proceedings in the US

The court applied Section 47 to 49 of the Arbitration and Conciliation Act, 1996, regarding the enforcement of foreign awards

It relied on Article 137 of the Limitation Act, 1963, and the precedent in Union of India v. Vedanta Ltd., which establishes that the three-year limitation period begins when the "right to apply accrues," often the date of communication of the award

For "public policy," the court applied the restrictive test from Vijay Karia v. Prysmian Cavi E Sistemi SRL and OPG Power Generation (P) Ltd. v. Enexio Power, holding that only a breach of the "fundamental policy of Indian Law" or "most basic notions of justice" justifies refusal

Definitions of "Factor" and "Factoring Business" under Section 2(i) and 2(j) of the Factoring Regulation Act, 2011, were examined

Finally, it applied the doctrine of election of remedies as defined in Transcore v. Union of India

Regarding limitation, the Court rejected the Respondent’s argument that time ran from the date the Award was signed; instead, it held that the "right to apply" accrued on 21.02.2022, when the ICC Secretariat officially communicated the signed Award to the Petitioner

On public policy, the Court found the transaction was not "factoring" but a commercial advance incentive linked to performance; thus, the Factoring Act did not apply

Furthermore, it noted that a Spanish entity does not fall within the definition of a "Factor" requiring RBI registration

Regarding election of remedies, the Court observed that the Award imposed "joint and several" liability; therefore, pursuing one debtor in the US did not extinguish the right to pursue the other in India

The "forbearance agreement" in the US was a conditional stay that revived the debt upon default, and the US Bankruptcy Court specifically reserved the Petitioner's right to pursue non-debtor entities like Respondent No. 1

The Petition was allowed, and the Award was deemed a decree of the Court. Respondent No. 1 was directed to pay the remaining unpaid amount plus interest within four weeks. The Petitioner was directed to file a calculation sheet within one week. List for compliance on 17.07.2026