The Public Policy Exception in the Enforcement of Foreign Arbitral Awards

A Comparative Analysis Between Saudi Arabia and Two BRICS Countries

Absztrakt

This paper examines the public policy exception under Article V(2)(b) of the 1958 New York Convention as a limit on enforcing foreign arbitral awards, comparing its treatment in Saudi Arabia, India, and China. It analyzes how each country defines and applies “public policy” to deny enforcement, referencing legal theories and case law. While all three states formally interpret public policy narrowly and support the Convention’s pro-enforcement stance, their practices differ: Saudi Arabia often invokes Sharia-based principles (e.g., prohibiting interest), though reforms are bringing more predictability; India limits the exception to serious violations of justice or morality, guided by key cases; and China rarely cites public policy, typically in matters of sovereignty or procedural issues. The jurisdictions show a trend toward narrower use of the exception, enhancing confidence in arbitration. The study calls for clearer legal definitions and more consistent judicial restraint as envisioned by Article V(2)(b).