"I realise that some of my criticisms may be mistaken; but to refuse to criticize judgements for fear of being mistaken is to abandon criticism altogether... If any of my criticisms are found to be correct, the cause is served; and if any are found to be incorrect the very process of finding out my mistakes must lead to the discovery of the right reasons, or better reasons than I have been able to give, and the cause is served just as well." -Mr. HM Seervai, Preface to the 1st ed., Constitutional Law of India.

Thursday, May 6, 2010

Doctrine of Optional Public Policy?

In my last post titled 'Review of the Consultation Paper on Proposed Amendments to the Arbitration and Conciliation Act, 1996 - Part I', I had criticised the law as laid down by the Supreme Court extending the applicability of Part I of the Arbitration and Conciliation Act, 1996 to even international commercial arbitrations held outside India. I had forgotten to mention another aspect of the issue: One result of such extension was that it allowed a party to challenge an award even if the seat of arbitration resulting in the award was outside India (Venture Engineering). What was held in Bhatia International and Venture Engineering was that parties could, while choosing a Non-Indian seat , contract out the applicability of Part I expressly or impliedly. When Venture Engineering held that even Section 34 would apply to such Non-Indian international commercial arbitrations and arbitral awards could be set aside for violation of public policy, it had the effect of creation of a new conception of public policy, one that is probably not found in any other jurisdiction- public policy that could be 'contracted out' at the option of a party. In other words, an Optional public Policy... Sounds oxy'moronic', isn't it?

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