Comparative analysis of ssangyong judgement with

Associate Builders judgement

SSANGYONG ENGINEERING AND CONSTRUCTION CO. LTD. ……....Appellant

Versus

NATIONAL HIGHWAY AUTHORITY OF INDIA …….Respondent

In this case the SC held that the wide import given to “fundamental policy of Indian law” in Western
Geco and Associate Builders is improper, and not in accordance with the intent and purpose of the
amended Sections 34 and 48 of the 1996 Act [para 23].

COMPARITIVE ANALYSIS OF SSANGYONG JUDGEMENT WITH ASSOCIATE BUILDERS JUDGEMENT :

SNO. SPECIES OF PUBLIC POLICY ASSOCIATE BUILDERS SSANGYONG JUDGEMENT

JUDGEMENT
1 FUNDAMENTAL POLICY It is clear that the Contravention of a law
OF INDIAN LAW juristic principle of protecting national interest;
“judicial approach” disregarding orders of superior
demands that a courts in India; principles of
decision be fair, natural justice such as audi
reasonable and alteram partem (in line
objective. On the with Renusagar Power Co. Ltd.
obverse side, v. General Electric Co.
anything arbitrary
and whimsical
would obviously
not be a
determination
which would either
be fair, reasonable
or objective.
(para 29)

The audi alteram

partem principle
which undoubtedly
is a fundamental
juristic principle in
Indian Law is also
contained in
Sections 18 and
Section 34(2)(a)(iii)
of the Arbitration
and Conciliation Act
1996.
(para 30)

The third juristic

principle is that a
decision which is so
perverse or
irrational that no
reasonable person
would have arrived
at the same is
important and
requires some
degree of
explanation. It is a
settled law that
where a finding is
based on –
(i) A finding
based on
no
evidence;
(ii) An arbitral
tribunal
takes into
account
something
irrelevant
to the
decision
which it
arrives at
(iii) Ignores
vital
evidence in
arriving at
its decision,
such
decision
would
necessarily
 be
perverse.
(para 31)

2 INTEREST OF INDIA This concerns itself This concerns itself with

with India as a India as a member of the
member of the world community in its
world community relations with foreign
in its relations with powers.
foreign powers.
(para 35)

3 JUSTICE & MORALITY An award is said to the SC adopted the ratio

be against justice of Associate Builderswherein it
only when it shocks was observed that an award
the conscious of would be against justice and
the court. morality when it shocks the
(para 36) conscience of the court;
morality, however, would be
“Morality” would, if determined on the basis of
it is to go beyond “prevailing mores of the day”
sexual morality [para 24];
necessarily cover
such agreements as
are not illegal but
would not be
enforced against
the given mores of
the day. However,
inference on this
ground would also
be if only
 something shocks
the conscious of
the court.
(Para 39)

4 PATENT ILLEGALITY A contravention of illegality which goes to the root

the substantive law of the matter, but excluding
in India would erroneous application of law by
result in the death an arbitral tribunal or re-
kneel of an arbitral appreciation of evidence by an
award. This must be appellate court. However, this
understood in the ground may be invoked if (a) no
sense that such reasons are given for an award,
illegality must go to (b) the view taken by an
the root of the arbitrator is an impossible view
matter and cannot while construing a contract, (c)
be of trivial nature. an arbitrator decides questions
beyond a contract or his terms of
A contravention of reference, and (d) if a perverse
the arbitration act finding is arrived at based on no
itself would be evidence, or overlooking vital
regarded as patent evidence, or based on
illegality. documents taken as evidence
without notice of the parties
An arbitral tribunal [paras 26 – 30].
must decide in
accordance with
the terms of the
contract, but if an
arbitrator
construes a term of
the contract in a
reasonable
manner, it will not
mean that the
award can be set
aside on this
ground.
Construction of the
terms of contract is
primarily for the
arbitrator to decide
unless the
arbitrator
construes the
contract in such a
way that it could be
said to be
something no fair
minded or
reasonable person
could do.
(paras 42.1 , 42.2,
42.3)