To be or not to be: the oscillating support of Indian courts to arbitration awards challenged under the public policy exception

Abstract

The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (NYC) seeks minimal court interference in the enforcement of an award. However, in exceptional circumstances, it grants courts power to refuse awards to preserve elements of sovereignty with the states. Consequently, states have interpreted the width of the exception as per their notions of public policy. The article analyses the Indian interpretation given to the ground of public policy in the light of violent shifts in the positions taken by the Supreme Court of India. The article critiques recent Supreme Court case law, for failure to preserve international comity and obligations under the NYC. Towards this, the first section of the article addresses the drastic broadening of the interpretation of public policy and as a corollary the increasing interference of courts in arbitration in recent times. The second section addresses the widening court interference from the perspective of the power to modify arbitral awards. The article traces the roots of the power through several court decisions and argues against such an assumption of power. It contrasts the power to modify arbitral awards against the partial setting aside of the award and concludes that it is only the latter mechanism that is permitted under the NYC.