Enforceability of a Foreign Arbitration Award in India: Understanding the Conundrum of Public Policy

As international trade expands, arbitration has increasingly become the preferred method for cross-border dispute resolution due to its efficiency and enforceability. The Arbitration and Conciliation Act, 1996, a key legislation in India, governs the recognition and enforcement of foreign awards, incorporating both the New York and Geneva Conventions. However, the enforcement of foreign awards in India is often challenged by objections on the grounds of 'public policy,' as the term has been subject to various judicial interpretations over time. This research paper examines the enforceability of foreign arbitration awards in India, focusing on the evolving concept of public policy. This research paper analyzes the judicial approach to public policy from the Foreign Awards Act, 1961, through landmark cases like Renusagar Power Co. v. General Electric Co. and Shri Lal Mahal Ltd. v. Progetto Grano Spa, up to the recent amendments in the Arbitration Act. This research paper highlights the need for reforms in the act and emphasizes their role in strengthening India's arbitration-friendly stance, which aims to balance judicial oversight with effective enforcement mechanisms, fostering a stable and predictable environment for international commerce. This evolution underscores India’s commitment to aligning its arbitration practices with international standards, enhancing its role as a hub for international dispute resolution.