After learning that Antonio's merchant ships have been lost at sea, Shylock excitedly anticipates the payment on his contract with Antonio. It appears as if Shylock's wish for the demise of Antonio will be realized.
Shylock makes his formal appeal to the Duke of Venice for fulfillment on the bond he has made with the Christian merchant. When the Duke sees Shylock, he tells him that he fully expects that Shylock, out of humanity and love, will not demand payment of Antonio's flesh, and that he will also forgive some portion of the debt. However, Shylock replies,
I have possessed your grace of what I purpose,
And by our holy Sabbath have I sworn
To have the due and forfeit of my bond.
If you deny it, let the danger light
Upon your charter and your city’s freedom. (4.1.35-39)
Even when Bassanio tries to offer Shylock twice the amount of the loan, the usurer refuses. He justifies his demands, saying that the Christians refuse to release those that they use "in slavish parts/Because you bought them." The angered Duke replies to Shylock by saying that he would dismiss the court were it not for a learned doctor of law's expected arrival.
Soon, Portia, disguised as a lawyer, appears with a letter from Dr. Bellario, stating that "he" is to represent the learned Bellario. Approaching Shylock, Portia offers him triple the amount of the debt, but Shylock insists upon the strict interpretation of the agreement. So, Portia agrees, cleverly noting that the "strict" interpretation allows no spillage of blood.
Also, Portia cleverly informs Shylock that there is another legal hold on Shylock: Since he is an alien in Venice, who seeks the life of a citizen, Shylock has broken Venetian law and his wealth can now be divided between the public treasury and the injured citizen, Antonio. Moreover, Shylock's own life is in jeopardy because of what he has attempted.
Falling upon the mercy of the court, Shylock is forced to convert to Christianity and loses half of his possessions.
Here are some points to consider in forming an opinion about this scene:
While there are different reactions by readers to this scene, even though Shylock has made terrible demands upon Antonio, Antonio did agree to them. But, when the Duke urges him to be merciful and offers him twice the monetary amount, Shylock has the opportunity to save himself the misery which he is finally dealt.
Shylock is blind-sided by the legal punishments dealt him by Portia. Nevertheless, when he makes a logical point about the Venetians' treatment of their "slavish" workers as not much better than his demands upon Antonio, his punishment does appear to be very harsh. Certainly, forcing him to convert to Christianity is extreme, and does not seem to serve any practical purpose. Still, Shylock has had the opportunity to accept three times the debt, so he has only his own greed to blame for his fate.