Unbridled Horse on a Run - A Critique of the Judgment - Ongc V. Saw Pipes

Abstract

The ONGC v. Saw Pipes Judgment has been widely criticized by all quarters of the legal fraternity, and rightly so. This ruling, by expanding the ambit of ‘public policy’ as a ground for setting aside arbitral awards, has negated one of the primary purposes for which the Arbitration and Conciliation Act was formulated, i.e. of giving finality to a judgment and has subsequently, paved the way for second guessing arbitration decisions. This Article deals with the abovementioned case in depth vis-à-vis the scope and ambit of Section 34 of the Act. The authors, while pointing out the shortcomings in the decision, argue that this decision has defeated whole purpose of repealing the 1940 Act along with violating the “Non-Interventionist” stance adopted by the Courts in recent cases.

Emphasis has been laid on the repercussions and aftermath of this judgment and its effect on the Alternate Dispute Resolution Mechanism of the Country. In the Authors’ opinion, the adverse effect of this judgment can be largely cancelled out if a larger bench corrects it or if legislation like that of the Arbitration and Conciliation Bill 2003 is passed.

Keywords: Arbitration, saw pipes, public policy