Public Policy Exception In Arbitration Law In India And The United Kingdom: A Comparative Analysis Of Judicial Interpretation And Its Impact On Commercial Certainty

Abstract

The public policy exception in arbitration law is an important tool in protecting the upholding of basic principles of law, and at the same time creates difficulties in respect of finality and enforcement of arbitral awards. This paper presents a comparative analysis of the interpretation and application of this exception in India and the UK, and in relation to its consequences on commercial certainty. Using statutory provisions, case law, and other pertinent international instruments, the analysis reveals the differences in the approaches taken by the courts in the two jurisdictions. Although historically India adopted a broad and interventionist interpretation, especially by landmark cases which created the concept of patent illegality, recent legislative changes and judicial practice have made this much tighter, more in line with international norms. By contrast, the United Kingdom has always been a restrictive and pro-enforcement jurisdiction, with minimal intervention of the judiciary and finality of arbitral awards. Business certainty, investor trust, and the arbitration landscape as a whole have all been profoundly impacted by these competing approaches, the study finds. In order to preserve the credibility of legal systems and arbitration as an effective means of resolving disputes, it is recommended that the public policy exception be read with a sense of proportion and principle.