Rationale & Relevance
The Judge applied the school of thought that an Arbitrator in an arbitration ought to apply the law but if he errs in his understanding or application of the law the parties have to live with it. He stated:
“If such an error amounted to a transgression of his powers it would mean that all errors of law are reviewable, which is absurd.”
Regarding the public policy issue, the Judge arrived at his decision based on a narrow/strict interpretation of the exception in that the court must see that the recognition and enforcement of an award violates public policy if such recognition and enforcement may endanger the interest of the state’s citizens by executing its public authority. According to the Judge, any public policy exception that cannot show clearly how the recognition and enforcement could damage the interest of a state’s public will not be considered as a bar to recognize or enforce the award.
Further, he was of the view that a party alleging breach of public interest must prove beyond doubt how the recognition and enforcement of the award would damage public good or how it would be clearly injurious to the public good or, that possibly, that the enforcement would be wholly offensive to the ordinary reasonable and fully informed member of the public on whose behalf the powers of the State are exercised.
Section 10 of the Arbitration Act provides that except as provided in the Act, no court shall intervene in matters governed by the Act. Section 10 restricts the jurisdiction of the court to only such matters as are provided for by the Act.
The Arbitrator is only subject to the limitations under the Act. The Act confers the Arbitrator with exclusive jurisdiction over questions of fact and law which flows from the provisions of the Act which exclude appeals and limits reviews. The court may only be approached as provided by the Act. Unless the arbitration provides otherwise, an award is only subject to the provisions of the Act, final and not subject to appeal or review and that each party to the reference must abide by and comply with the award in accordance with its terms. The Legislature intended the arbitral tribunal to have exclusive authority to decide whatever questions submitted to it, including any question of law.
Under Section 35(1) of the Act, recourse to the High Court against an arbitral award may be made only by an application for setting aside the award under subsection (2). This implies that an applicant seeking to set aside an arbitral award must demonstrate the grounds under the said sub-section.
A party alleging breach of public interest must prove beyond doubt how the recognition and enforcement of the award would damage public good or how it would be clearly injurious to the public good or, that possibly, that the enforcement would be wholly offensive to the ordinary reasonable and fully informed member of the public on whose behalf the powers of the State are exercised.