In an International Commercial Arbitration, the Courts only have a limited supervisory role under Arbitration and Conciliation Act, 1996 where intervention should be at minimal level and limited to the circumstances deemed to be unfair and unreasonable which shocks the conscience of the Court – National Highway Authority of India Vs. Ssangyong Engineering and Construction Co. Ltd. – Delhi High Court
Hon’ble Delhi High Court held that:
(i) The consideration of mandatory national laws is important to ensure that an award is not opposed to the public policy of the country and therefore can be made enforceable. The mandatory national laws include the basic notion of morality and justice, therefore, the Courts need to determine whether an award is adherent to the said principles as included within the public policy.
(ii) The doctrine of public policy per se has been subject to various interpretations by the Constitutional Courts of the country. Over a period of time, the Courts in the country adopted a broader view with respect to the interpretation of the said term thereby shifting the trends.
(iii) It is clear that insofar an international commercial arbitration is concerned, the term public policy would not mean a mere violation, rather there is a threshold which mandates the interference in such awards where only in cases of unfairness and unreasonableness which goes to the root of the matter that can be termed a violation of the basic principles adopted by the country by way of various laws.
