Public Policy Conundrum in the Enforcement of Arbitral Award

Abstract

Arbitration is a consensual conflict resolution procedure that allows the parties to settle their differences swiftly and amicably in contrast to the conventional courtroom dispute resolution method. The autonomy given to the parties to adopt the procedure of their choice saves time and money. The decision or award can be challenged on limited grounds. According to Sections 34 and 48 of the Arbitration and Conciliation Act of 1996, an arbitration decision in India may be overturned if it violates public policy.  The role of public policy in implementing arbitral verdicts is still a controversial topic in the arbitration world, despite the fact that “the New York Convention and the UNCITRAL” model legislation acknowledge its importance. However, the term 'public policy' isn't clearly defined in this Act; instead, courts have tried to explain it through various legal decisions. Indian courts have used the public policy argument to reject arbitration decisions that clash with public policy of the country. Even though India is part of the New York Convention, it has gained a reputation for making it hard to enforce international arbitration decisions. This is mainly because there's no clear understanding of what the public policy exception means in India. This article investigates the theory of public policy and its use in enforcing Arbitral Awards.