The modifier law specifies that an arbitral award is not overturned by the court alone for misapsion of the law or by a re-assessment of the evidence.1 A court will not verify the merits of the case, whether the arbitral award is contrary to the fundamental policy of Indian law.2 The amending law has also introduced a new section which provides that the award can be set aside if the court finds that it is tainted by the irregularity of patent law that appears on the face of the arbitration award in the case of national arbitration. For the India-based ICA, „patent illegality“ was held outside the issue of arbitration.3 In Chongqing Xinpei Food Co Ltd,13 The SPC`s response in Chongqing Xinpei Food Co Ltd v Strength Shipping Corporation, Liberia ([2006] Min Si Ta Zi No. 26). The Wuhan Maritime Court denied the existence of an arbitration agreement and decided not to notify its judgment for approval. In that case, it was a dispute in which the parties disagreed on the inclusion of a charter arbitration agreement in their bill of lading. The foreign party in that case then appealed to the Hubei Supreme People`s Court, which then notified the SPC of the judgment. Although the ASP ultimately refused to conclude that there was an arbitration agreement between the parties, the SPC considered this case to be a matter concerning the validity of a foreign arbitration clause and criticized the Wuhan Maritime Court for its failure to invoke the reporting mechanism. The Court of Cassation, which had supported the trial judgment, stated incontability that the compromise clause was a civil law contract and that, as such, it could be challenged independently of the underlying agreement. This view was fully supported by the Supreme Court, which refused to appeal. (5) In particular, the Supreme Court approved the conclusion of the first instance that „a compromise clause is by nature a civil law contract and that, therefore, the civil law provisions relating to the invalidity of contracts apply to it.“ The trial court rejected the allegation that the contract had been entered into in the public interest and that it had been characterized as a membership contract. (2) On the contrary, the Court of Appeal accepted the applicant`s argument in this regard.
(3) Moreover, the Court of Appeal found somewhat surprisingly that the agreement that arbitration should be final and binding – with the exception of the use of annulment – was illegal, although clear legislation recognises the validity and applicability of such conditions. All these errors committed by the Court of Appeal were corrected by the Court of Cassation, which approved the judgment of the trial court. (4) At one point, the contractor challenged the validity of the compromise clause (but not the underlying contract) in the arbitration tribunals, based on three main reasons: at Kaye/Nu Skin UK Ltd [2009] EWHC 3509 (Ch), the applicant asserted that a compromise clause was not binding in an English legal contract providing for arbitration proceedings in Utah.