Originally from World Arbitration and Mediation Review (WAMR)

PREVIEW

At the heart of this article is the Indian Supreme Court’s interpretation of the “public policy” exception, a legal safety valve that allows courts to set aside arbitral awards under Section 34 of the Arbitration and Conciliation Act, 1996. For years, the Court wielded public policy like a broad sword, cutting through arbitral awards on grounds that were often sweeping and subjective. But following the 2015 legislative amendments, the blade has been dulled. The Court now tends to act more like a gatekeeper than a warrior, intervening only when a clear and compelling breach of legal or moral norms is evident. Using a mixed-methods approach, this paper blends doctrinal analysis with original empirical research, coding all 28 annulment cases decided by the Supreme Court between 2012 and 2023. The findings reveal a shift from expansive review to judicial restraint, bringing India’s approach closer to global standards, where arbitral finality is respected unless an award offends the foundational values of the legal system.

Yet cracks remain in the current legal framework. Courts continue to vary in how they interpret what counts as a violation of public policy, sometimes treating it as a matter of national ethics, at other times as a question of procedural fairness. This unpredictability clouds the arbitration landscape, leaving parties unsure of whether their “final” award will truly stand. The paper closes by calling for a more structured and transparent judicial framework, one that balances the autonomy of arbitration with the guiding compass of justice, ensuring that public policy serves as a guardrail, not a wildcard.