Question

Under Section 34(2)(b)(ii), when is an arbitral award deemed to be "in conflict with the public policy of India"?

Q: Answer-Under Section 34(2)(b)(ii), when is an arbitral award deemed to be 'in conflict with the public poli...

Explanation Explanation 1 to Section 342b clarifies an award is in conflict with the public policy of India, only ifi the making of the award was induced by fraud, corruption, or other coercive means or ii the award is in breach of the sovereignty of India, the security of the State or morality or iii the award is against the fundamental policy of Indian law. Critically, mere legal error or disagreement with the award does not constitute public policy violation. The Supreme Court has narrowly construed public policy to prevent awards from being easily overturned, maintaining arbitrations finality. Challenges based on public policy are rarely successful.

A Whenever the award is unpopular or controversial

B Whenever the award deviates from one party's preferred outcome

C When the making of the award was induced by fraud, corruption, or when it violates fundamental policy governing India's administration of justice (e.g., award procured through bribery, or contradicting constitutional principles)

D When the award contradicts any law enacted by Parliament

E When either party disagrees with the tribunal's interpretation of law

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