In ONGC v Saw Pipes Ltd the Supreme Court decided the ambit and scope of the courts' jurisdiction where an award is challenged under Section 34 of the Arbitration and Conciliation Act 1996.

The court held that the arbitral tribunal cannot act in breach of the provisions of substantive law or the Arbitration Act. Giving a wider meaning to the term ‘public policy’ as mentioned in Section 34, the court ruled that an award could be set aside if it is contrary to:
· fundamental domestic policy;
· domestic interests;
· justice or morality; or
· domestic law.

Relying on earlier judgments, the court concluded that the courts have jurisdiction to intervene in disputes of a general reference of a contractual nature (as opposed to matters referred on a specific question of law), and may set aside an award that was prima facie based on an erroneous legal proposition.