The Public Policy Exception to The New York Convention: The Gulf Cooperation Council (GCC) Perspective

Abstract

Despite the crucial role of public policy in the recognition and enforcement of arbitral awards, the New York Convention 1958 lacks any explicit elucidation of this exception. This absence of clarification has sparked concerns that public policy may be subject to misuse or misapplied in some states, including the Gulf Cooperation Council (GCC) States. Some practitioners attribute the misapplication of public policy in these States to the impact of Sharia, which is often utilised as a synonym for public policy. Hence, they suggest that these States should minimise the role of Sharia. The literature on public policy in the GCC States is limited. To build a thorough understanding of public policy within these states and to evaluate their practices, a doctrinal methodology was primarily employed for the critical analysis of both primary and secondary sources. Uniquely, and contrary to other studies that treat GCC States as a monolithic bloc, this thesis argues that the application of the public policy exception varies across the GCC States. It argues further that GCC States do not follow a specific method in applying and interpreting public policy. While practices in Qatar, and the UAE demonstrate broad application and interpretation of public policy, their counterparts—Kuwait, Oman, and Bahrain—show a more favourable approach towards the enforcement of foreign arbitral awards and the application of public policy. The misapplication of public policy is attributable to two primary factors: first, inadequate legislation regulating arbitration, including the role of Sharia in this process; and second, the lack of familiarity among courts and arbitration bodies with the application of public policy. The thesis finds that Sharia and public policy are not synonymous; however, Sharia constitutes a part of the GCC States' public policy. Additionally, it concludes that Sharia does not inherently hinder the recognition and enforcement of foreign arbitral awards. Nevertheless, the unclear way GCC States adopt Sharia contributes to the misapplication and misinterpretation of public policy. Foreign arbitral awards that breach Sharia may still be enforceable in the GCC States, provided they do not contravene the primary sources of Sharia, namely the Quran and Sunnah. The thesis suggests codifying Sharia or adopting a specific school of jurisprudence as ways of ameliorating the problem. It also urges the legislatures in the GCC States to adopt a unified arbitration law that distinguishes and categorises public policy into, for example, domestic and international public policy.