Ssangyong v. NHAI

The case tightens how courts can set aside arbitral awards under Section 34. The Supreme Court trimmed the wide meaning of “public policy”, clarified “patent illegality”, and held that the 2015 Amendment to Section 34 works prospectively—it applies to setting-aside applications filed on or after 23 Oct 2015. In a rare move, the Court used Article 142 to treat the minority award as the final award.

• Predictable and narrower Section 34 review.
• Prospective reach of the 2015 changes confirmed.

1. Did the Court’s reading of “public policy” under Section 34 (post-2015) make challenges more predictable and limited?
2. Does the 2015 Amendment apply prospectively to Section 34 applications, blocking use of old, broad grounds for pre-2015 arbitrations?

• Public Policy (Section 34, post-2015): Limited to (i) fundamental policy of Indian law (e.g., national interest statutes, obedience to higher-court orders, natural justice), (ii) most basic notions of morality or justice.
• Patent Illegality (domestic awards): Only illegality that goes to the root; no re-appreciation of evidence; no setting aside for mere wrong application of law.
• Prospective Application: 2015 changes apply to all Section 34 applications filed on/after 23 Oct 2015, whatever the arbitration start date.

• Narrower Public Policy: Broad readings rejected; focus on fundamental policy, superior-court orders, and natural justice.
• Patent Illegality (domestic): Must strike at the root; mere legal error or re-appreciation is out.
• 2015 Act Prospective: Applies to Section 34 applications filed on/after 23 Oct 2015.
• Article 142: Minority view treated as the award to do complete justice.

Section 34 post-2015 allows setting aside only for precise public-policy breaches and root-level patent illegalities. The amendments are fully prospective. Exceptional facts may justify corrective relief under Article 142.

• Brings predictability to award-challenge law.
• Discourages overbroad public-policy attacks.
• Explains when Article 142 can fix unfair outcomes.

• “Public policy” is narrow and specific.
• “Patent illegality” = goes to the heart, not minor errors.
• 2015 changes apply to Section 34 filings from 23 Oct 2015.
• Minority award may stand via Article 142 in rare cases.

Mnemonic: “NIP-PAP” — Narrow Interpretation of Public policy • Patent illegality at root • Amendment is Prospective.

1. Spot: Is the challenge broad/vague? Likely fails after Ssangyong.
2. Check: Does illegality hit the core of the award?
3. Apply: Use 2015 Act prospectively for Section 34 filings.

Public Policy

Tight, specific grounds to protect core legal values; not a catch-all.

Patent Illegality

An error that strikes at the foundation of the award (domestic awards).

Article 142

Power of Supreme Court to do complete justice between parties.

• Key decisions refining “public policy” and “patent illegality” post-2015.
• Cases on Article 142 used to mould relief in arbitration matters.