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CASE STUDY: HSBC PI Holdings (Mauritius) Ltd v Avitel Post Studioz Ltd and others

In two landmark judgments of Arbitration promulgated within few days difference, the Bombay High Court in HSBC PI Holdings (Mauritius) Ltd v Avitel Post Studioz Ltd and others and the Supreme Court of India in World Sport Group (Mauritius) Ltd v MSM Satellite (Singapore) Ltd, both held that issues of extortion ought to appropriately be managed by the arbitral council as per the intervention understandings went into between the gatherings, and not by the courts, withdrawing from a prior questionable line of power from India which had held something else.

The judgement of HSBC PI Holdings (Mauritius) Ltd v Avitel Post Studioz Ltd and others was a commendable step taken by judiciary in limiting the scope of intervention by courts in the arbitration process.


HSBC PI Holdings ("HSBC"), a venture holding organization for the Asia Division of HSBC, appealed for between time injunctive and pleading before the Bombay High Court to enforce the assertion made by Singapore arbitration proceedings to force Avitel and related respondents ("Avitel") to pay money or potentially security to the degree of HSBC's unique speculation of US$60 million spent on an unsuccessful venture.


HSBC had put US$60 million in Avitel on the premise, on the portrayals and endeavours by Avitel that the monies would be utilized to buy specific film hardware, empowering Avitel’s auxiliary to support an agreement with the BBC, said to be worth between US$1 billion to US$1.3 billion. A Share Subscription Agreement (SSA) was appropriately marked between the gatherings. The particular SSA said that the understanding would be interpreted as per the laws of India and that any mediation would be led under the Singapore International Arbitration Centre ("SIAC") Rules in Singapore.


It consequently rose that there were serious questions over the authenticity of the business and clients. A prior gathering between the parties to the dispute with an individual said to have been a "BBC agent”, to provide the endorsement by BBC provided out of his agreement with avitel, was found by HSBC to have been deceitful. HSBC initiated SIAC intervention procedures against Avitel.


HSBC filed an appeal the Bombay High Court looking for orders against Avitel requiring the deposit of HSBC's unique venture of US$60 million as well as on the other hand security for the speculation that had apparently disappeared. Avitel asserted that the understanding was represented by Indian law and that since an issue of misrepresentation was not equipped for settlement through Arbitration under Indian law, HSBC's appeal was in this manner with no establishment.

The Bombay HC held the decision in the favour of HSBC and laid down that:

  1. The parties to the dispute had through contract choose to settle the dispute in Singapore and therefore Singapore laws govern them
  2. As per Singapore laws, the arbitration tribunal can decide upon the matters involving fraud and therefore there is no issue
  3. the contention raised by Avitel that, under Indian law, the arbitral awards by the Singapore arbitral court would not be applicable, would strife with the "public policy of India" and thus was not legitimate.

Thus taking all these into account, the Bombay high court ordered avitel to pay the amount of compensation as decided upon by the Singapore Arbitration council.  

  • Introduction
  • Brief Facts
  • Final Decision

BY : Kopal Bansal

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