ANTI-ARBITRATION INJUNCTIONS: MSM V. WSG AND THE PUBLIC POLICY CONUNDRUM INTRODUCTION

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1 ANTI-ARBITRATION INJUNCTIONS: MSM V. WSG AND THE PUBLIC POLICY CONUNDRUM INTRODUCTION The law and practice of international commercial arbitration has undergone tremendous development in recent times and the element of consent, inter alia, is considered to be its cornerstone. In fact, consent plays a huge role in alleviating fears about lack of neutrality and nullifies any advantages that may have been enjoyed by either party in domestic courts of their home country. 1 Without the consent of both parties, typically manifested in the form of an arbitration agreement/clause, the arbitration is usually not valid. 2 It is for this reason that the issue of protection and preservation of the will of the parties gains significance in the arbitration context. And it is this very concept that anti-arbitration injunctions militate against. A converse of anti-suit injunctions, anti-arbitration injunctions are an evolving concept in the arbitration jurisprudence of the common-law world. They are essentially orders granted by the domestic courts of a country prohibiting parties from proceeding with the arbitration. 3 This paper seeks to deal with the intersection between such injunctions and the principle of public policy in international arbitration, specifically in the Indian context. It will study the common criticism of anti-arbitration injunctions and the role they play in the international framework of arbitration law, with specific reference to their application in India. PART I: ANTI-ARBITRATION INJUNCTIONS AND CRITICISMS As aforementioned, anti-arbitration injunctions [hereinafter, AAIs ] are typically passed by the domestic courts of a nation and prohibit parties from initiating or proceeding with arbitration. They are usually justified on grounds of the invalidity of the arbitration agreement but are often motivated by a multitude of other factors. 4 In the past few years, the practice of issuing AAIs has become increasingly widespread, especially in common law 1 Margaret L. Moses, THE PRINCIPLES AND PRACTICE OF INTERNATIONAL COMMERCIAL ARBITRATION, 2 (1 st edn., 2008). 2 An agreement to arbitrate may be entered into either prior to or after the dispute has arisen. However, in some countries, the domestic law makes it mandatory to arbitrate in relation to certain kinds of disputes. Alan Redfern & Martin Hunter, LAW AND PRACTICE OF INTERNATIONAL COMMERCIAL ARBITRATION, 6-7 (4 th edn., 2006). 3 Gary B. Born, INTERNATIONAL COMMERCIAL ARBITRATION, VOL. I, 1049 (2010). 4 Id. This includes attempts to delay the dispute resolution process, protecting a particular party s interests, public interest considerations etc. 1

2 jurisdictions. 5 However, it is interesting to note that such injunctions have been passed not just by courts at the seat of arbitration but also by those of contracting states. 6 In fact, the involvement of courts other than those of the seat is one of the vital reasons for the unpopularity of AAIs. On one level it creates issues with respect to the enforceability of the injunction in another State. 7 Second, courts in the nation of either contracting party then tend to put the interests of that party on a pedestal, thereby undermining the neutrality of the arbitration process. 8 Moreover, parties often resort to using AAIs as a delaying tactic in order to thwart the arbitral process, thus adding to their undesirability. 9 Even from a legal perspective, AAIs have not been well-received in the international community, with the international arbitration law framework pitted against them in various aspects. The first illustration of this is in context of the well-settled doctrine of Kompetenz- Kompetenz which allows an arbitral tribunal to adjudicate upon disputes regarding its own jurisdiction. 10 Remarkably however, the precise scope and application of the doctrine can vary depending on the legal regime. While a positive application enables tribunals to decide on their own jurisdiction, a negative application clashes head-on with the conception of AAIs. Along with empowering tribunals to decide jurisdictional issues, it entails courts being prohibited from considering matters of jurisdiction, prior to their consideration by the tribunal. Thus, the powers of courts to intervene in arbitral proceedings are severely curtailed. 11 AAIs therefore directly conflict with this view by allowing courts to have the first say. 12 Secondly, it is also argued that AAIs violate provisions of both the UNCITRAL Model Law on International Commercial Arbitration [hereinafter, Model Law ] as well as the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Professor Julian D.M. Lew QC, Does National Court Involvement Undermine the International Arbitration Process, 24(3) AMERICAN UNIVERSITY INTERNATIONAL LAW REVIEW 489, (2009). 6 Giulia Carbone, The Interference of the Court of the Seat with International Arbitration, 2012(1) JOURNAL OF DISPUTE RESOLUTION 217, 220 (2012). 7 Supra note 5, at Julian D.M. Lew, Control of Jurisdiction by Injunctions Issued by National Courts, as cited from INTERNATIONAL ARBITRATION 2006: BACK TO BASICS?, ICCA Congress Series, Volume 13, 185 (2007). 9 George A. Bermann, The Gateway Problem in International Commercial Arbitration, 37(1) THE YALE JOURNAL OF INTERNATIONAL LAW 1, 5 (2012). 10 Born, supra note 3, at The most notable example of the negative application of competence-competence is French law. John J. Barcélo III, Who Decides the Arbitrators Jurisdiction? Seperability and Competence-Competence in Transnational Perspective, 36 VANDERBILT JOURNAL OF TRANSNATIONAL LAW 1115, 1124 (2003). 12 Gabrielle Kaufmann-Kohler, How to Handle Parallel Proceedings: A Practical Approach to Issues such as Competence-Competence and Anti-Suit Injunctions, 2(1) DISPUTE RESOLUTION INTERNATIONAL 110, 112 (2008). 2

3 [hereinafter, New York Convention ], neither of which envisage such injunctions. Art. 5 of the former bars court interference except in accordance with the Model Law 13 and Art. 17J restricts this power to the issuance of interim measures, not including injunctions. 14 Further, a plain reading of Art. II of the New York Convention also seems to suggest that the court has limited powers to intervene, and AAIs militate against that. 15 Overall therefore, the validity of AAIs vis-à-vis these international instruments remains shaky, at best. Finally, on the issue of enforcement, AAIs remain in the grey area owing to the involvement of international comity. Although principles of comity dictate that States should show deference for one another s laws and decisions, there is no law governing the enforceability of such measures across States. 16 Consequently, each nation follows its own rules, leading to an absolute lack of uniformity and certainty. 17 Therefore, on the whole, AAIs remain a disputed form of relief in arbitration proceedings. It is in the backdrop of this international framework that the next section examines AAIs under Indian law and analyses their consistency with the principles of the Arbitration and Conciliation Act, PART II: ANTI-ARBITRATION INJUNCTIONS IN INDIAN LAW Ordinarily, the standards for granting AAIs are much higher than those for granting anti-suit injunctions, owing to the consensual nature of arbitration and the need to minimize court intervention. In India however, the distinction between the thresholds has been greatly blurred. 18 For a long time, Indian courts followed the lead of English judges and granted AAIs only in rare cases, based on well-accepted grounds such as prevention of parallel proceedings, protection from oppressive or vexatious proceedings, forum non conveniens etc. 19 Recently however, the Bombay High Court in MSM Satellite (Singapore) Pte Ltd. v. World Sport Group (Mauritius) Ltd. granted an AAI on the ground of public policy i.e. it 13 Article 5, UNCITRAL Model Law, 1985, reads as follows: Article 5. Extent of court intervention - In matters governed by this Law, no court shall intervene except where so provided in this Law. 14 Article 17J does not define interim measures but this definition is set out in Art. 17(2) and precludes injunctions. See Zheng Sophia Tang, Parallel Proceedings and Anti-Arbitration Injunction, 7 JOURNAL OF BUSINESS LAWS 589, 591 (2012). 15 Supra note 5, at Julian D.M. Lew et al, COMPARATIVE INTERNATIONAL COMMERCIAL ARBITRATION, (2007). 17 Moses, supra note 1, at JUSTICE R.S. BACHAWAT S LAW OF ARBITRATION AND CONCILIATION, VOL. II, , 2490 (5 th edn., 2010). 19 See Modi Entertainment Network vs. W.S.G. Cricket PTE Ltd., (2003) 4 SCC 341; Union of India vs. Dabhol Power Co., MANU/DE/0379/2004; Claxton Engg. Services Ltd. vs. TXM OLAJ-ESGAZKUTATO KTF, [2011] EWHC 345 (Comm); Excalibur Ventures LLC vs. Keystone & Ors., [2011] EWHC 1624 (Comm). 3

4 stated that allowing the matter to be decided by a foreign arbitral tribunal would in itself be against public policy. 20 This raises some interesting questions about the law and status of AAIs in India. Do AAIs constitute an incursion into the power of arbitral tribunals to determine jurisdiction even in India? What is the role of public policy in this regard and what impact does it have on the criteria for enforceability of foreign awards in India? This part attempts to throw light on these areas by analysing the Indian jurisprudence in this field. It is well-recognised that enforcement of a foreign arbitral award may be refused on the ground that it violates the public policy of the country. Derived from the New York Convention, 21 this principle has long been incorporated even into Indian municipal law 22 and subjected to extensive judicial interpretation as well. 23 However, MSM v. WSG represents a rare case where an AAI was granted on this basis. In light of the above, it is submitted that AAIs based on grounds of public policy go against the spirit of Article II of the New York Convention and violate corresponding provisions in the scheme of the Arbitration and Conciliation Act, 1996 [hereinafter, the Act ]. More specifically, it is submitted that the AAI in the instant case did not fall within the ambit of the Indian interpretation of public policy. The factual matrix that gave rise to this case arose out of the transactions related to the Board of Cricket Control [hereinafter, BCCI ] and Lalit Modi controversy. 24 The plaintiff, MSM, claimed that they had initially entered into an agreement with the BCCI, granting them media rights for the Indian subcontinent, which was subsequently terminated on purpose. Thereafter, MSM was informed by the defendant, WSG, that BCCI had entered into an agreement with them granting them the same media rights but that they would be willing to facilitate the relinquishment of the same in favour of MSM, based on a facilitation deed. Pushed into a corner, MSM agreed and entered into a deed of facilitation with WSG under which WSG was to be paid certain amount as facilitation fee and BCCI was to be paid the same amount for which MSM had originally acquired the rights. Subsequently however, it came to the knowledge of MSM that as on the date of the deed, WSG did not possess the 20 MSM Satellite (Singapore) Pte Ltd. v. World Sport Group (Mauritius) Ltd., 2010 (112) BomLR [Hereinafter, MSM v. WSG ] 21 Art. V(2)(b), The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, S. 48(2)(b), Arbitration and Conciliation Act, See Renusagar Power Co. Ltd. v. General Electric Co., AIR 1994 SC 860; Oil and Natural Gas Corporation Ltd. v. Saw Pipes Ltd., AIR 2003 SC Jason Burke, Lalit Modi on brink of axe as IPL controversy gathers momentum, THE GUARDIAN (21 st April, 2010), available at (Last visited on April 18, 2013). 4

5 rights that it purported to have relinquished. 25 Therefore, it instituted a suit [hereinafter, Suit No. 1 ] against WSG and BCCI seeking, inter alia, a declaration that the deed was illegal and that no amount was due to be paid by MSM to WSG. Immediately after that, WSG invoked the arbitration clause in the facilitation deed and served notice upon MSM for arbitration of these disputes. Therefore, MSM filed another suit [hereinafter, Suit No. 2 ] and applied for restraining the arbitration proceedings by way of an anti-arbitration injunction. The Single Judge, while hearing the notice of motion in Suit No. 2, dismissed it on the ground that even if the deed was held to be illegal in Suit No. 1, severability would dictate the survival of the arbitration clause. 26 Thereafter, MSM filed an appeal from this order which came up for consideration in the instant case. 27 At the outset, the decision of the Court in this appeal gives rise to complex questions regarding the jurisdiction of Indian courts in arbitration matters. Ordinarily, when one party invokes arbitration, the other party can choose to contest such invocation, in which case an application may be made to the Court under S. 8 or S. 45 of the Act, asking for a reference to arbitration. 28 However, in the instant case, neither of these sections was invoked by MSM or WSG, even though the dispute before the Court did involve questions about the validity of arbitral proceedings. In fact, the dispute manifested itself in the form of a civil suit. Therefore, it would be interesting to examine here whether the Court had any jurisdiction at all to undertake an inquiry regarding the arbitration agreement, under the Act. However, since such an analysis would be beyond the scope of this paper, the researcher here has assumed that the Court indeed had jurisdiction to do so, although the basis of such inquiry may be contested. The court in this case examined the facts in detail and in arriving at a decision, considered the issue of whether a potential arbitral award would stand scrutiny on the touchstone of India s public policy. The first of the issues that arise from this case pertains to the stage at which public policy considerations can be brought in. In this regard, the researcher submits that a pre-award examination of the arbitrability of the dispute on the threshold of Indian public 25 4, MSM v. WSG. 26 The principle of autonomy of the arbitration agreement or severability essentially means that even if the contract containing the arbitration agreement is held to be invalid, the arbitration clause/agreement itself will survive such invalidity, except in certain specified cases. FOUCHARD GAILLARD GOLDMAN ON INTERNATIONAL COMMERCIAL ARBITRATION, (1999). 27 7, MSM v. WSG. 28 Ss. 8, 45, Arbitration and Conciliation Act, S. 8 applies in case of domestic arbitrations while S. 45 would apply to international commercial arbitrations, as per the scheme of the Act. 5

6 policy, as in this case, violates the scheme of the Act and is therefore illegal. 29 It is wellsettled that while Art. V(2)(a) of the Convention pertains to an examination of arbitrability at the stage of enforcement, there is no rule regarding such an examination at a pre-award stage. 30 Even Art. II(1), which allows for examination of arbitrability, does not envisage application to a pre-award stage. 31 Nevertheless, it is now well-accepted that such objective arbitrability at a pre-award stage should be decided in accordance with the national law of the court hearing the case. 32 The applicable national law in this case, which dictates the scope of such an inquiry is the Act itself and the relevant provision in this regard would be S. 45. As per the ruling in Bhatia International v. Bulk Trading S.A., Part I of the Act does not apply to international commercial arbitrations if expressly or impliedly excluded. 33 Hence, assuming the Act was applicable, it could only have been S. 45 and not S.8 which applied, 34 as is evident from the Court s own interpretation. 35 It is pertinent to observe that both S.8 and S. 45 of the Act deal with the matters that can be examined by a Court in making a reference to arbitration. However, the wording of both the sections presents significant differences. 36 S. 8 is based on Art. II(1) of the New York 29 Article II, The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Article V(2)(a), The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 reads as follows: Article V(2) - Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that: (a) The subject matter of the difference is not capable of settlement by arbitration under the law of that country; 31 Herbert Kronke, Patricia Nacimiento et al, Article II, RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS: A GLOBAL COMMENTARY ON THE NEW YORK CONVENTION, (2010). 32 Lew et al, supra note 16, at Bhatia International v. Bulk Trading S.A., (2002) 4 SCC 105. Although this has recently been overruled in the case of Bharat Aluminium Co. Ltd. v. Kaiser Aluminium Technical Services, Inc., (2012) 9 SCC 552, that case only has prospective application. Therefore, the decision in Bhatia International is the relevant decision for the purposes of this case. 34 This is because the Governing Law clause of the facilitation deed in this case clearly specified that it was to be governed and construed in accordance with the laws of England & Wales. Further, the seat of arbitration was specified as Singapore, as per ICC Rules of Arbitration. Therefore, the jurisdiction of Part I was impliedly excluded , 52, MSM v. WSG. 36 Ss. 8, 45, Arbitration and Conciliation Act, 1996 read as follows: 8. Power to refer parties to arbitration where there is an arbitration agreement. - (1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. (2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. (3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made. 45. Power of judicial authority to refer parties to arbitration. - Notwithstanding anything contained in Part I or in the Code of Civil Procedure, 1908 (5 of 1908), a judicial authority, when seized of an action in a matter in 6

7 Convention and includes scope for determining arbitrability while S. 45, in correspondence to Art. II(3), only allows for determination of validity and not arbitrability. 37 Admittedly, the Supreme Court in S.B.P. & Co. v. Patel Engineering Ltd. sought to expand the scope of the inquiry under S. 8 to include both validity and arbitrability. 38 However, it did not envisage a similar expansion of the scope of S Further, applying the doctrine of casus ommisus, it has been opined that the difference deliberately maintained by the law makers between sections 8 and 45 cannot be obliterated judicially. 40 This suggests that under S. 45, the scope of the Court s inquiry is limited to determining whether the arbitration agreement is null and void, inoperative or incapable of being performed. 41 Therefore, it is submitted that an examination on the benchmark of public policy in this regard would be, as seen here, clearly violative of the Act. Secondly, on a related note, the Court s reasoning with regard to S. 45 is notable in context of the facts of this case. The argument of the plaintiff in this regard was two-fold. They pleaded first, that the non-obstante part of S. 5 of the Act would limit the judicial intervention in such cases and second, that in any case, S. 16 gave this power to the arbitrators themselves. 42 But the Court chose to accept the contentions of the defendants and opined that since Part II was applicable to this arbitration, the latter part of S. 45 would preclude the application of Part I of the Act anyway. They held that to the extent that an agreement could be null and void, inoperative and incapable of being performed, the Court had the power to make this determination. 43 It is interesting to note however, that there was no finding of the Court with regard to the arbitration agreement in this case falling under any of the aforementioned criteria. Applying its own interpretation therefore, S. 45 would have mandated the Court to refer the parties to arbitration, something which the Court failed to do here. Instead, they undertook an inquiry into public policy. This reiterates that the nature of the examination to respect of which the parties have made an agreement referred to in section 44, shall, at the request of one of the parties or any person claiming through or under him, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed , India Household and Healthcare Ltd. v. LG Household and Healthcare Ltd., AIR 2007 SC 1376; ARBITRABILITY: INTERNATIONAL AND COMPARATIVE PERSPECTIVES, International Arbitration Law Library Series Set, Volume 19, (2009). 38 S.B.P. & Co. v. Patel Engineering, AIR 2006 SC Chloro Controls Pvt. Ltd. v. Severn Trent Water Purification Inc., (2012) 4 ARBLR 1 (SC); Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd., AIR 2005 SC , Kotak Mahindra Bank ltd. v. Sundaram Brake Linings Ltd., (2008) Suppl 1 ARBLR 132 (Mad). 41 Therefore, irrespective of whether the disputes are arbitrable or not, the Court will refer parties to arbitration as long as the arbitration agreement is valid. Usha Drager Private Ltd. v. Draegerwerk Aktiengesellschaft, (2006) 1 RAJ 498 (Del). See also Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd., AIR 2005 SC , MSM v. WSG , MSM v. WSG. 7

8 be adopted by the Court must be prima facie and limited to the extent provided in the section, and should not make an incursion into the domain of other provisions. 44 Thirdly, on the question of what constitutes public policy, the Court s application has serious repercussions for the growth of Indian jurisprudence. It held that since BCCI is a body discharging public duties in the nature of State functions 45 and this case is concerned with the corruption and fraud in relation to the finances of BCCI, allowing this matter to be arbitrated upon would not be in furtherance of public policy. However, this presents difficulties on multiple levels. One, on the issue of matters pertaining to corruption and fraud falling under public policy, the Court s reasoning seems to be fundamentally flawed. Referring to Ss. 28 and 23 of the Indian Contract Act, 1872, 46 the Court held that parties could not bargain away their right to approach the Court when the issues involved related to fraud. This is absurd because prima facie, it implies that whenever there is an issue of fraud involved in any contract, parties cannot go to arbitration. Exception 1 to S. 28 specifically saves arbitration agreements from the ambit of such illegality. 47 Therefore, the reading given by the Court would only be possible under principles of public policy, not of contract law. Second, with regard to the arbitrability of disputes involving fraud or corruption, the Court s reasoning is slightly contentious. Although there is some Indian jurisprudence to advocate that serious allegations of fraud are enough to oust the jurisdiction of the arbitral tribunal, that is qualified by the fact that it must be at the instance of the party accused of fraud. 48 In fact, 44 Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd., AIR 2005 SC 3766 followed in Andritz Oy v. Enmas Engineering, (2007) 3 ARBLR This was held in the case of M/s Zee Telefilms Ltd. v. Union of India, AIR 2005 SC S. 23 specifies what considerations and objects are lawful and what not, while S. 28 says that agreements in absolute restraint of legal proceedings shall be void. 47 S. 28, along with Exception 1 reads as follows: 28. Agreements in restraint of legal proceedings void. - Every agreement,- (a) by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights; or (b) which extinguishes the rights of any party thereto, or discharges any party thereto from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent. Saving of contract of refer to arbitration dispute that may arise. - Exception 1.- This section shall not render illegal a contract, by which two or more persons agree that any dispute which may arise between them in respect of any subject or class of subjects shall be referred to arbitration, and that only the amount awarded in such arbitration shall be recoverable in respect of the dispute so referred. 48 Abdul Kadir Shamsuddin Bubere v. Madhav Prabhakr Oak, AIR 1962 SC 406 followed in N. Radhakrishnan v. Maestro Engineers, (2010) 1 SCC 72. The Court in the MSM v. WSG seeks to distinguish this on the ground that there the allegations are coupled with the public nature of BCCI. See 32, MSM v. WSG. 8

9 well-settled Indian 49 and English law 50 suggests that if there is no prima facie proof of the allegations, there is no reason to stay arbitration proceedings in regard to cases of fraud, bribery etc., especially when the challenge is not specifically to the arbitration agreement. 51 Additionally, it is admitted that in the instant case allegations of corruption are coupled with the fact that BCCI is a body discharging public duties. However, the judgement itself acknowledges that only some of BCCI s functions were public and that it was not under any kind of Governmental control. In fact, the larger reason for granting such importance to BCCI was related to the status accorded to cricket in India. 52 This is controversial because it implies not only that the threshold for public bodies is very low but also that even for bodies exercising partially public functions, arbitration will be precluded in case allegations of fraud or corruption are made. Further, it could lead to a dilution in the scope of sovereign functions, which would far-reaching ramifications in other areas of law as well. 53 Finally, with respect to the application of public policy itself, the Court appears to have employed an unusual standard. The question that is ordinarily considered in matters of public policy, especially at a pre-arbitration stage, is whether a particular matter violates public policy. 54 In this case however, the Court s opinion holds that allowing arbitration would not be in furtherance of public policy and thus undertakes a much broader inquiry. Such a negative application could cause discomfort because it has the potential to be read as lowering the standard for violation of public policy. This is further enhanced in light of the fact that public policy inquiries in relation to arbitrability ordinarily have a much narrower scope. 55 Therefore, an application in this manner widens the scope for matters to be deemed unarbitrable/unenforceable on such grounds and could seriously affect the law relating to public policy in the arbitration context. On the whole thus, the judgement leaves a lot to the imagination. Even though the Court was of the opinion that an AAI was necessitated by the peculiar facts of this case, the narrow perspective adopted by it raises serious doubts about the value of its decision. 49 Vinod Shantilal Gosalia v. Anil Vassudev Salgaoncar, MANU/MH/0093/1996; Asiasoft (India) Pvt. Ltd. v. Globesyn Technologies Ltd., (2005) 2 ARBLR 264. In the latter case, the Court opined that unless it was ex facie evident that the agreement was vitiated by fraud etc., the Court must refer parties to arbitration. 50 Russell v. Russell, (1880) 14 Ch D Fiona Trust v. Yuri Privalov, [2007] EWCA , MSM v. WSG. 53 Liability of the State in many areas of law is premised on the exercise of a sovereign function. Therefore, if the scope of sovereign functions is expanded, it would impact all those areas. Eg. Tortious liability. 54 Bachawat, supra note 18, at Karl-Heinz Böckstiegel, Public Policy and Arbitrability, as cited from COMPARATIVE ARBITRATION PRACTICE AND PUBLIC POLICY IN ARBITRATION, ICCA Congress Series No. 3 (1987). 9

10 CONCLUSION The discomfort with AAIs, in India and otherwise, is not entirely new-fangled. Legal regimes across countries have long been unsure about the contours of the law relating to AAIs due to their nebulous legal foundations. 56 In a similar vein, public policy considerations in the context of international commercial arbitrations have been a point of extensive debate, discussion and litigation. Famously described as a very unruly horse which you never know where it will carry you, 57 public policy has often been seen to incorporate the haziest aspects of a country s legal system, such as justice and morality. 58 Consequently, it is likely that an amalgamation of these two concepts will give rise to highly contentious issues in the law and practice of international commercial arbitration. The decision in MSM v. WSG provides a mere precursor of what jurisprudence in this area could look like. Therefore, even as courts continue to address these concerns on a case-to-case basis, the need for formulating a well-thought out law in this regard has been pushed to the forefront. This involves finding a delicate balance between two competing interests of parties to commercial transactions and of national courts in protecting public policy. For India specifically, a good starting point could be to clarify the scope of inquiry under Ss. 8 and 45 of the Act, in order to ensure their harmonisation. Additionally, it would be interesting to see how the Courts deal with a case in which an injunction is sought, after commencement of arbitration since neither of S. 8 or S. 45 would come into play then. However, till such time that these changes are brought about, the legality of AAIs in India, especially on grounds of public policy remains tenuous, both in domestic and international arbitrations. Therefore, even though MSM v. WSG may have opened the Pandora s box, in the absence of concerted inquiry such questions will remain arrows shot in the dark. 56 Supra note 8, at ; Born, supra note 3, at Per Burrough J., Richardson v. Mellish, (1824) 2 Bing Matthew Gearing, The Public Policy Exception Is the Unruly Horse Being Tamed in the Most Unlikely of Places? (March 17, 2011), KLUWER ARBITRATION BLOG, available at (Last visited on April 29, 2013). 10