The 'PUBLIC POLICY' ground for SETTING ASIDE under Section 34(2)(b)(ii) Arbitration Act 1996 has been NARROWED by:
Answer & Solution
Correct answer: B.
1. The 'PUBLIC POLICY' ground under Section 34(2)(b)(ii) of the Arbitration Act 1996 has evolved:
2. RENUSAGAR Power Co. v. General Electric Co. (1994) 1 SCC 644 (Supp): public policy interpreted NARROWLY — only fundamental policy of Indian law, interest of India, justice or morality.
3. ONGC v. SAW PIPES Ltd, (2003) 5 SCC 705: WIDENED public policy to include patent illegality, perversity.
4. ASSOCIATE BUILDERS v. DDA, (2015) 3 SCC 49: ELABORATED meaning of public policy components.
5. The 2015 AMENDMENT to Section 34 NARROWED public policy:
6. (i) EXPLANATION 1 to Section 34(2)(b)(ii): public policy includes — (a) award making is induced by fraud or corruption; (b) award is in contravention with fundamental policy of Indian law; (c) award conflicts with basic notion of morality or justice.
7. (ii) EXPLANATION 2: contravention of fundamental policy shall not entail a REVIEW ON MERITS.
8. Section 34(2A) (inserted 2015) added PATENT ILLEGALITY as a separate ground for DOMESTIC AWARDS only — also narrowly construed.
9. SSANGYONG ENGINEERING & CONSTRUCTION Co. Ltd. v. NHAI, (2019) 15 SCC 131 — clarified post-2015 standards.
10. Hence option B is correct.
_Source: Arbitration and Conciliation Act 1996 (Bare Act) + Mediation Act 2023 — Arbitration and Conciliation Act 1996, Section 34(2)(b)(ii); Renusagar Power Co. v. General Electric Co. (1994); ONGC v. Saw Pipes (2003); Associate Builders v. DDA (2015); Ssangyong Engineering (2019)_
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