The role of public policy in international commercial arbitration

Vukadinović Marković, Jelena (2025) The role of public policy in international commercial arbitration. In: 11th Jubilee International Scientific Conference Ohrid School of Law – 2025 „The Law and Responsibility“ 15-18 May Ohrid 2025. Institute for Legal-Economic Research an Education Iuridica Prima, Skopje, pp. 207-219. ISBN 978-608-4996-29-3

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Abstract

Public policy plays a dual role in resolving disputes through international commercial arbitration. At different stages of the arbitral process, it can function either as a shield or as a sword. As a shield, public policy sets the boundaries within which the parties’ freedom to conclude an arbitration agreement may operate, thereby protecting the fundamental values of the state where the arbitral tribunal is seated i.e., national public policy. Conversely, as a sword, public policy comes into play during the recognition and enforcement of arbitral awards, limiting such recognition when it conflicts with the broadly accepted values of the international community i.e., international public policy. The concept of public policy is neither precisely nor universally defined. Broadly, it encompasses a state’s fundamental economic, legal, moral, political, religious, and social values, which constitute the core norms shaping the legal and social order of that state. However, values deemed part of public policy in one jurisdiction may not hold the same status in another, complicating the establishment of a uniform, universal definition. Given the complexity of public policy and its diverse application in both national and international contexts, this paper seeks to examine how national courts and arbitral tribunals interpret public policy values at various stages of the arbitration process.

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