One cannot draw a presumption that Indian law on arbitration should apply if there’s no

hindrance or exclusion is given for the same. Therefore, if place of arbitration is outside India
then part 1 of arbitration act cannot apply. Also, it has to be understood that words have to be
understood as they appear in their natural, ordinary, grammatical or popular sense and other
interpretations will arise only when literal interpretation is not possible. Words cannot be
added or rejected from the express language of the statute.

Marriott International Inc. v. Ansal Hotels Ltd1 was overturned by the abovementioned
judgment. This case talked about the jurisdiction of the courts which cannot extend to the
areas not within its ambit and also, courts cannot perform the function of legislation in the
garb of interpretation or construction.

In J.K. Cotton Mills Spinning and Weaving Milk Co. Ltd. v. State of UP2, it’s noted that:

“In the interpretation of statutes, the courts always presume that the legislature inserted every
part thereof for a purpose and the legislative intention is that every part of the statute should
have effect." 

The Supreme court has accepted the principal of JK cotton mills case in many more cases at a
large scale. Venture Global3 case is one of them where this principle was applied and by such
application, court accepted the objection regarding the enforcement of the award because it
was in violation of Foreign Exchange Management Act, 1999 along with other laws and
regulations in ordering the transfer of shares. Court emphasized on the applicability of the
Part 1 of the arbitration act and at the same time welcomed the broad interpretation of the
term public policy. Court has clarified upon the applicability of part 1 of the act on
international commercial arbitration by saying that the act is silent on this point as otherwise,
party won’t be able to exclude its applicability on international commercial arbitrations held
outside India. Implication of the Venture Global 4 case is very broad. Since there’s a trend in
courts of India to sweep every arbitral award within its ambit, the intention of the legislature
to exclude the court is not given force properly.

Associate Builder v. Delhi development authority5 is another case in line to discuss the
meaning, scope and interpretation of the term public policy as a ground to challenge arbitral

1
2000 (3) ARBLR 369 (Delhi).
2
(1961) 3 SCR 185.
3
AIR 2008 SC 1061.
4
AIR 2008 SC 1061.
5
2014 (4) ARBLR 307(SC).
award under section 34 of arbitration act. Courts, by referring to its decision in ONGC v. Saw
Pipes6, chalked down the situations where public policy can be invoked as a ground:

Contrary to the fundamental policy of Indian law;

Contrary to the interests of India;

Contrary to justice and morality; or

Patently illegal.

6
(2003) 5 SCC 709.