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Under **Explanation 1 to Section 34(2)(b)(ii)** (added in 2015), an arbitral award is in conflict with the **public policy of India** only if:
A{'text': 'The award is criticised in any political speech of any kind whatsoever in any part of India under any provision of any law in force in any State of India regardless of any other consideration of any kind under any law in force', 'label': 'A'}
B{'text': 'The award is criticised in any newspaper of any kind whatsoever in any part of India under any provision of any law in force in any State of India regardless of any other consideration of any kind under any law in force', 'label': 'B'}
C{'text': 'The making of the award was induced or affected by fraud or corruption or in violation of section 75 or section 81; or it is in contravention with the fundamental policy of Indian law; or it is in conflict with the most basic notions of morality or justice', 'label': 'C'}
D{'text': 'The award is criticised on any social media platform of any kind whatsoever in any part of India under any provision of any law in force in any State of India regardless of any other consideration of any kind under any law in force', 'label': 'D'}
Answer & Solution
Correct answer: C. {'text': 'The making of the award was induced or affected by fraud or corruption or in violation of section 75 or section 81; or it is in contravention with the fundamental policy of Indian law; or it is in conflict with the most basic notions of morality or justice', 'label': 'C'}
1. Explanation 1 to Section 34(2) was inserted by the 2015 Amendment to narrow the public-policy ground.
2. An award is in conflict with the public policy of India **only if**: (i) the making of the award was induced or affected by **fraud or corruption** or in violation of section 75 or 81; (ii) it is in contravention with the **fundamental policy of Indian law**; or (iii) it is in conflict with the **most basic notions of morality or justice**.
3. Explanation 2 further clarifies: the test as to whether there is a contravention with the fundamental policy of Indian law **shall not entail a review on the merits** of the dispute.
4. The 2015 narrowing reversed expansive readings such as *Saw Pipes*.
_Source: ICSI CS Executive Paper 1 — Jurisprudence, Interpretation & General Laws, Lesson 13 (Arbitration and Conciliation Act, 1996), pp. 314-333._
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