ONGC Ltd. v. Western Geco International Ltd.

Facts

A dispute arose over an award concerning a contract to upgrade a seismic survey vessel, with controversy over the period of delay attributable to each party. ONGC challenged the award under S. 34, and the Court examined what the expression 'fundamental policy of Indian law' comprehended.

Issues

• What are the components of 'fundamental policy of Indian law' within the public policy ground under S. 34?
• Whether an award failing the tests of judicial approach, natural justice or Wednesbury reasonableness is liable to be set aside?

Arguments

ONGC contended the tribunal's apportionment of delay was perverse and irrational and thus contrary to the fundamental policy of Indian law. The respondent contended the tribunal's findings of fact were not open to interference under S. 34.

Held

The Court expanded 'fundamental policy of Indian law' to include three juristic principles: adoption of a judicial approach (fair, reasonable and objective decision-making), adherence to natural justice, and conformity with Wednesbury principles of reasonableness, such that a perverse or irrational award no reasonable person would reach could be set aside. It expressly declined to exhaustively enumerate the head, leaving it open to expansion, and on the facts interfered with part of the award.

Ratio decidendi

An award contrary to the fundamental policy of Indian law — by lacking a judicial approach, violating natural justice, or being Wednesbury-unreasonable/perverse — is in conflict with the public policy of India and liable to be set aside under S. 34.

Significance

Marked the high-water mark of expansive judicial review by importing administrative-law Wednesbury reasonableness into S. 34, effectively permitting merits review. The Law Commission specifically targeted it; the 2015 Amendment added an Explanation that the fundamental-policy test 'shall not entail a review on the merits', and Ssangyong held the Western Geco expansion (and Wednesbury) no longer survives.

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