Originally from Defeating and Defending Awards: Arbitrability, Public Policy, and Global Court Practice

PREVIEW

3.1   Introduction

In this research, the specific point where public policy is significant, is under the New York Convention 1958 Article V(2)(b), which provides for a public policy exception defence to the recognition and enforcement of arbitral awards. To effectively analyse the scope of Article V(2)(b) – for answering a part of Research Question B – the term “public policy” must be contextualised and understood to examine the scope under which it is engaged.  This chapter examines the notion of public policy, in answering the first part of Research Question A: What is understood by the notion of  public policy? The following Sub-Research Enquiries must be discussed:

A1.        The basis of public policy,
A2.       The general perception and understanding of public policy by different legal jurisdictions, and
A3.       The attributes and characteristics of public policy.

To discuss these Sub-Research Enquiries in a logical and systematic manner, this chapter is roughly divided into the following sections:

A1–A2: The universal concept of public policy, which discusses the basis of public policy, different jurisdictions’ understanding and perception of public policy and its varying attributes. (Sections 3.2–3.3).
A3:        The different categories of public policies, their characteristics and comparisons. (Sections 3.4–3.5).

What is understood by the term public policy? Why does public policy matter? What does it mean in a legal context, particularly in private international law, and how does it affect legal proceedings? Specifically, why does it matter in certain legal arguments? These questions might seem obvious and redundant, but they are far too often misunderstood, misinterpreted, and misapplied. For some, public policy is not even a real issue in the international arbitration world, while they may even be rather dismissive of the subject altogether, privately holding a (misconceived) belief that it is irrelevant, and relying on the old worn mantra that the exception is rarely applied and infrequently succeeds, making it a redundant defence. This common viewpoint has some merit; however, one cannot ignore the fact that the public policy exception defence is here – most probably here to stay – and that it “is never argued but when all other points fail”.  If this is the case, and from the author’s own English Bar practice experience, then that alone deserves analysis and research. If only for reasons that the area deserves scientific investigation, the practice of arbitration would not be harmed by such a study. Rather, it would enforce and strengthen the common belief as it stands – if that is really the case. In legal practice, ambiguities and uncertainties are not favourable, as users of the legal system prefer certainty and clear standards of practice.

Public policy as an academic subject embraces many disciplines and concepts from the social sciences, including economics, sociology, political, economy, social policy, program evaluation, policy analysis, and public management, as well as those in the area of governmental administration, management, and operations. In terms of legal analysis, public policy is understood to be a part of the traditional institute of private international law. It is generally agreed that public policy echoes the moral, social, economic and legal values of any particular society and it is considered vital that they must be resolutely safeguarded for the proper functioning of that society. Hence, it is often said that the objective of public policy is to defend the fundamental principles of the society upon which it is built.

It is public policy in the legal context that this chapter is focused on. For the avoidance of doubt, it is public policy as it is known in the Common Law system, that will be employed throughout this thesis as a legal concept, rather than in any other sense, such as politic or otherwise. It should also be borne in mind that this chapter will not address in detail classic cases such as Richardson v Mellish,  and Hilmarton Ltd. v Omnium de Traitement et de Valorisation SA,  and so on. Mounting the questionably notorious “unruly horse” of Burrough J. will also not be attempted in this thesis, nor will it be cantered down the well–trodden path of public policy, where many scholars ahead of the author’s time have already dissected the area in microscopic detail.  What this research aims to do, is ascertain what the term “public policy” means in the legal setting, in particular, its content – what it includes – with reference to Article V(2)(b) of the New York Convention 1958. In effect, this is done in preparation to answer the question on the scope of Article V(2)(b), which is dealt with in Chapter 6: Public Policy and Arbitrability under the New York Convention 1958 and the Model Law. As stated, it is the general concept and notion of public policy in the legal context that will be discussed, whilst bearing in mind that even this task will be riddled with challenges, as the notion itself can be said to be ghostly. Consequently, it is probably impossible to pinpoint and declare with certainty what public policy is. This work aims to provide an analysis of the concept.