Situating Public Policy in the Indian Arbitration Paradigm: Pursuing the Elusive Balance

Abstract

Arbitration in India is governed through a consolidated legislation namely, The Arbitration and Conciliation Act 1996 (as amended in 2015). One of the overarching aims of the Act is to minimise judicial intervention in the arbitral process. The Act therefore clearly outlines permissible instances when such intervention could be made. One instance would be the possibility of having an arbitral award set aside on clearly enumerated grounds including that of public policy. Though seemingly straightforward, attempts to forge an understanding of the term have resulted in much bewilderment, the consequence of which has been contradictory decisions and confused understanding. This article attempts a critical look at how ‘public policy’ as a ground for setting aside an arbitral award has been understood within the Indian arbitration paradigm. Part I of the paper traces in brief the history and development of law relating to arbitration in India to provide a context for assessing current legal developments concerning public policy. Part II elaborates on the concept of public policy as generally understood in the arbitration paradigm, while Part III attempts to extract a possible understanding from often contradictory case laws emanating from the Supreme Court of India. Part IV evaluates the effect of the recent amendments on the prevalent understanding of public policy, and Part V concludes by arguing that a continuing failure to clearly demarcate boundaries of the concept of public policy would have serious repercussions in the long run on any efforts to make India a hub of global arbitration.