The aforesaid statement
[1] depicts the elusive nature of ‘public policy’ in legal proceedings that draw upon its presence in statute, conventions and legal systems. The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (“
New York Convention”) is a critical international convention that gives room for public policy considerations while assessing enforcement of a foreign arbitral award (foreign award). Article V(2)(b) of the New York Convention states:
“(V)(2) Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that:
(a) The subject matter of the difference is not capable of settlement by arbitration under the law of that country; or
Govt of India v. Vedanta Ltd & Ors
Civil Appeal No. 3185 OF 2020 (Arising out of SLP (Civil)
No.7172 of 2020
Background facts
On October 28, 1994, a Production Sharing Contract (PSC) was
executed between the parties and Oil and Natural Gas Corp Ltd
(ONGC) for development of Ravva Oil and Gas Field (Ravva Field).
Subsequently, disputes arose between parties with respect to
recovery of development costs, which were referred to arbitration
seated in Malaysia. On January 18, 2011, Arbitral Tribunal in
Malaysia passed an Award (Award) whereby the Govt of India (GoI)
was directed to pay an amount of USD 278.87 million to Vedanta.
Pursuant to the same, in April 2011, Vedanta made certain
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The words of J. Burrough aptly justify the unpredictability of
the interpretation of the term public policy when he
says,
Public Policy is an unruly horse where once you
stride on it you do not know where it s going to take
you.
For decades India has been perceived as a jurisdiction which is
not arbitration friendly and where enforcement of foreign arbitral
awards is problematic. As per section 34(2)(b)(ii) of the
Arbitration Act, 1996 an arbitral award can be set aside by the
court if it is against the public policy of India .