Public Policy And Enforcement Of Foreign Arbitral Awards In India: A Case Note On Renusagar Power Co. Ltd V. General Electric Co.
- IJLLR Journal
- 17 minutes ago
- 2 min read
Radhika Kapoor, Amity Law School, Noida
1. INTRODUCTION
The enforcement of foreign arbitral awards has historically posed complex challenges for domestic courts, particularly in jurisdictions where public policy considerations intersect with national sovereignty, economic regulation, and judicial control.
In India, this tension was significantly addressed by the Supreme Court in Renusagar Power Co. Ltd v. General Electric Co., a landmark judgement that laid the foundational contour of the “public policy” exception in the context of enforcement of foreign arbitral awards. The Supreme Court adopted a narrow and intentionally aligned judicial restraints and pro- enforcement bias at a time when India was still evolving as an arbitration-friendly jurisdiction.
Section 7 (1)(b)(ii) of the Act permitted refusal of enforcement if the awards was “contrary to the public policy in India.” However, the Act did not define public policy, leaving the term open to judicial interpretation. In India, the notion of public policy historically suffered from conceptual vagueness and judicial elasticity, creating apprehension that courts might employ it as tool for excessive intervention.
Such an expansive understanding posed a serious challenge to India’s obligation under New York Convention, 1958 which mandates a pro -enforcement bias and restrict judicial scrutiny at the enforcement stage. The absence of a precise definition of public policy in early legislative framework further heightened concerns that enforcement proceedings could degenerate into a re-examination of the merits of the dispute, thereby eroding the core principles of arbitration.
This case note traces the factual background and legal issues in Renusagar, analyses the Supreme Court’s reasoning, situates the judgement within the evolving jurisprudence on public policy, and evaluates its long – term implications on Indian arbitration law, particularly in light of later decisions such as ONGC v. Saw Pipes, and the Arbitration & Conciliation Act, 1996. The judgement assumes critical importance as it marked India’s first authoritative judicial exposition on the scope and limits of public policy in international commercial arbitration.
