Public policy consists of the “moral, social or economic principle[s] so sacrosanct . . . as to require [their] maintenance at all costs and without exception”. Public policy limits the application of laws or regulations when a national legal system’s fundamental principles of public policy are threatened. Public policy has played a role in national legal systems arguably since before “law” even became “systematic”. Its provenance is ancient. In 1853, the House of Lords described public policy as “that principle of law which holds that no subject can lawfully do that which has a tendency to be injurious to the public, or against public good”.2 But despite its long history, public policy remains a difficult concept for lawyers, accustomed to applying black letter rules, to pin down. How are the contours of public policy defined? What threshold is necessary to establish a principle as one of public policy? What is the relationship between public policy and the applicable substantive law?

 

This paper addresses the role of substantive principles of transnational public policy in the international arbitral context. It begins by defining substantive transnational public policy and then explains how rules of substantive transnational public policy are to be identified. The paper then outlines the core matters of substantive public policy and examines the debate surrounding the role substantive transnational public policy should play in international arbitration.

 

 

When a national court is resolving a dispute with international elements, it may look to the private international law rules or conflicts of law rules to determine whether and which public policy rules it should apply.