International treaties are considered to be an important source of public international law as has been mentioned in Article 38 (1)(a) of the Statute of the International Court of Justice. International treaties usually contain exceptions that are ai...
International treaties are considered to be an important source of public international law as has been mentioned in Article 38 (1)(a) of the Statute of the International Court of Justice. International treaties usually contain exceptions that are aimed to protect the sovereignty of the states and to ensure higher acceptance of the treaty among the states. Treaties are applicable under public international law as well as under private international law. These exceptions mentioned in international treaties are to be construed narrowly. This practice has been accepted by most of the states across the world. Public policy exception is one such which is found in international treaties. This may or may not be included expressly in the international treaty. It is believed that such exceptions are only to be invoked in extraordinary cases. This exception should not be used as an exception to not comply with international obligations. When states consent to be bound by an international treaty, it is expected of them to perform its obligations in its entirety. This is based on the principle of pacta sunt servanda which signifies that states will perform its obligations under the treaty in good faith.
The New York Convention is a multilateral treaty which has been ratified by a number of states. The Contracting States under this Convention have the obligation to recognize and enforce foreign arbitral awards. The public policy exception has been expressly mentioned in the New York Convention under Article V(2)(b) and this is also enshrined in the UNCITRAL Model Law on International Commercial Arbitration 1985. This exception is subject to varied interpretation owing to the fact that it has not been defined in the Convention itself. Public policy exceptions are being increasingly included in bilateral investment treaties and free trade agreements. Public policy exception is one of the grounds for refusal of recognition and enforcement of foreign arbitral awards. Finality of the arbitral award depends largely on its enforcement. Public policy exception, that acts as a bar to the enforcement proceeding, is subject to the interpretation of enforcing state. The enforcing states in many cases invoke the public policy ground to refuse enforcement and ultimately evade its obligations under international law and treaty law. Invoking the public policy exception often creates hindrances for the enforcement of arbitral awards. The state in question in this thesis is India. Indian courts have been criticized for invoking the ground of public policy in refusing enforcement of foreign awards quite often and also for the erratic interpretation of the public policy exception itself. In my thesis, I will consider what is the relevance of treaty obligations under the New York Convention. I will then focus on scenarios in which the refusal of national courts to enforce arbitral awards can be considered as breaching treaty obligations under international law. Then the focus of this thesis will shift to how the Indian judiciary has interpreted and applied the public policy exception under the New York Convention over the years and whether it has reneged from its obligations under the Convention. In the course of my thesis, I will argue that public policy exception is not applied uniformly across borders by national courts and this exception is used by states to not enforce foreign arbitral awards in many cases, which defeats the purpose of the New York Convention as a whole. In that regard, I will analyze the Indian interpretation given to the public policy exception in the light of violent shifts in the positions taken by the Supreme Court of India. I will further analyze whether such violent shifts could bring upon India a state responsibility for breaching treaty obligations under international law. I will focus on instances where enforcement of arbitral awards-meaning to give full force and effect within the country where such enforcement is sought and in its domestic law-is unsuccessful and this lack of relief is attributable to the acts or omissions of the state and whether India has truly fulfilled its obligations under the New York Convention.