Question

The judgment in ............................. skews the delicate balance, carefully crafted by the Model Law (and enshrined in s 34), between finality of arbitral awards on one hand and permissible judicial review on the other.

• A. Renu Sagar Power Co vs. General Electric Corporation
• B. ONGC vs. Saw Pipes Ltd.
• C. Sundaram Finance vs. NEPC
• D. Olympus Superstructures Pvt. Ltd vs. Meena Vijay Khetan

Hint:

The evolution of the term "public policy" is central to understanding arbitration law in India. Remember the key cases in sequence: \textit{Renu Sagar} (narrow interpretation), \textit{Saw Pipes} (wide interpretation including "patent illegality"), and the subsequent 2015 Amendment (which restricted the \textit{Saw Pipes} interpretation).

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
The question refers to a landmark judgment in arbitration law that significantly expanded the scope of judicial review of arbitral awards under Section 34 of the Arbitration and Conciliation Act, 1996. The core principle of modern arbitration law is minimal judicial intervention to ensure the finality of awards. The question implies that a particular judgment disturbed this balance by broadening the grounds for challenge.
Step 2: Detailed Explanation:
The case being referred to is Oil & Natural Gas Corporation Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705. In this case, the Supreme Court interpreted the term "public policy of India" under Section 34. The court gave it a very wide meaning, holding that an award could be set aside if it was "patently illegal." This "patent illegality" ground was not explicitly mentioned in the Act but was read into the concept of public policy. This decision was widely criticized for opening the floodgates for challenging arbitral awards on their merits, thereby undermining the finality of the arbitration process and going against the spirit of the UNCITRAL Model Law. The law was later amended in 2015 to narrow down the scope of "public policy" and clarify the "patent illegality" ground, largely to undo the effects of the \textit{Saw Pipes} judgment.
- \textit{Renu Sagar} had earlier defined "public policy" in a much narrower sense.
- \textit{Sundaram Finance} and \textit{Olympus Superstructures} deal with other aspects of arbitration.
Step 3: Final Answer:
The judgment is ONGC vs. Saw Pipes Ltd.

Answer 2

The question asks which judgment disturbed the careful balance the Model Law and Section 34 struck between the finality of arbitral awards and the scope of permissible judicial review. Let us weigh each option.

1. Renu Sagar Power Co vs. General Electric Corporation: This earlier case actually narrowed the meaning of public policy for the purpose of resisting enforcement of a foreign award, restricting it to fundamental policy of Indian law, the interests of India, or justice and morality. It preserved finality rather than disturbing it, so it does not fit the question.
2. ONGC vs. Saw Pipes Ltd.: Here the Supreme Court interpreted public policy of India under Section 34 broadly enough to include patent illegality as an independent ground for setting aside a domestic award. This considerably widened the grounds on which courts could interfere with an award's merits, upsetting the balance the Model Law intended between limited judicial review and finality. This matches the question directly.
3. Sundaram Finance vs. NEPC: This case dealt with interim measures and the interplay between different sections of the Arbitration and Conciliation Act, not with expanding the public policy ground for setting aside awards.
4. Olympus Superstructures Pvt. Ltd vs. Meena Vijay Khetan: This case concerned the enforceability of an arbitration clause found within a larger agreement containing an arbitration clause for future disputes, not the scope of judicial review under Section 34.

Since only the second case broadened the public policy ground to the point of undermining the finality the Model Law sought to protect, the correct answer is ONGC vs. Saw Pipes Ltd.