Amelia C. Rendeiro

89 Texas L. Rev. 699

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In this Note, Ms. Rendeiro analyzes Indian public policy as applied to arbitral awards. The author first situates India’s statutory scheme and case law in light of international criticism and a limited national defense of measures perceived to be protectionist. Rendeiro introduces the economic history of post-colonial India, from its failed efforts to create a socialistic democracy through protective economic regulations to its eventual relaxation of foreign investment regulation and privatizing of much of the economy. More recently, India has become one of the most attractive investment destinations in the world. India’s arbitration laws have likewise advanced, explains Rendeiro. The adoption of the UNCITRAL Model Law in the 1990s was an effort to harmonize Indian arbitration law with that of other nations, although applying it to domestic disputes, as India has done, has been a source of criticism.

The majority view holds that Indian arbitration law is pro-arbitration to attract business and investment. The minority view, meanwhile, prefers to leave the courts some power to intervene in the process, as this will protect parties with weaker bargaining power, including Indian parties in international commercial disputes.

Rendeiro, analyzing these two paradigms, argues that they can be reconciled, allowing India’s legal scheme to attract foreign investors and encourage development while maintaining limited protectionist measures to ensure procedural and substantive fairness for Indian parties. She first looks at the public policy exception in India’s arbitration statute. Rendeiro proceeds to defend, on legal and practical grounds, India’s interpretation of the exception. However, Rendeiro finds that problems have arisen since the Indian Supreme Court extended the application of the public policy exception, which was originally applied only in the domestic context, to international commercial arbitrations held outside of India.

In conclusion, Rendeiro finds that the desires for arbitration to attract foreign investment and to provide Indian parties with an equitable dispute resolution mechanism are reconcilable through certain reforms.