The papers presented at today’s conference highlight the increasing importance of public policy in international arbitration. When international arbitration principally involved disputes between contracting parties, few cases concerned issues of public policy, and it was also less relevant to questions of enforcement. However, in recent years, international arbitration has governed more and more disputes that raise issues of public policy – not only investment treaty arbitrations but cases in which arbitrators must decide issues of public law (such as antitrust, securities, or employment law) or rule on matters concerning large public infrastructure projects.

 

Because of these trends, the scope and interpretation of the “public policy” defense to enforcement of an arbitration award under Article V(2)(b) of the New York Convention, as well as under other conventions and domestic arbitration statutes, becomes even more important. For decades, the “public policy” exception has given rise to several contentious questions. In particular:

1) Is the “public policy” exception designed to protect the local policies or politics of individual states or jurisdictions, or is it designed only to protect “international” or “supranational” policy?

2) What are the substantive contours of the exception? Is the exception meant to be primarily procedural, to protect the policy in favor of due process rights of the parties, or is it equally substantive, forbidding enforcement of awards that conflict with local law of substantial public importance?