Should Summon Monster spells work in Sigil?

I'd rule that Summon Creature works in Sigil, it just summons creatures that are already in Sigil. You can simply come up with a different list of creatures in Sigil. Celestial/Fiendish whatever is a little boring, but maybe it summons Cranium Rats, or common nuisances and pests from Undersigil, the odd Elemental roaming the hidden passages of the Cage, a Dretch that was at a bar before being summoned, or even members of a Hive street gang.

I think that it's an unwise and unfair restriction against PCs if they don't work in Sigil.

Here's what happens at the end of the gate spell:

"Immediately upon completion of the service, the being is transported to your vicinity, and you must then and there turn over the promised reward. After this is done, the creature is instantly freed to return to its own plane."

The first effect will not transport the creature in or out of Sigil, but could teleport it from anywhere in Sigil to you. Otherwise, if you were in Sigil and the creature were outside when the task completed for example, I would have the creature sense this information and know that it could reach you by going to the nearest appropriate portal. You might have it simply terminate the spell if the creature is outside Sigil and you are in... but this means that the spellcaster in question has just summoned an extremely powerful Outer Planar entity and breached a contract with it!

The second effect frees the creature, but doesn't necessarily transport it anywhere. Usually such creatures can plane shift on their own. In Sigil, they're going to be leaving by the door.

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An intriguing idea about petitioners. Perfectly good conspiracy theory for a game. I'd have the normal case be that any given soul takes a simple portal out and then the usual conduits to the appropriate divine realm. This normally happens immediately and almost automatically, most of the time. You can get to Mechanus even if you die in Limbo, for example.

Now, you might require that any resurrection involving summoning the soul from the afterlife -- that is, a resurrection that doesn't involve a soul that has hung around in Sigil -- might require moving the target body outside of the City! We don't hear about this one way or the other in canon, that I can recall, though it makes a logical consequence of the setting stipulation.

Certainly any magical construction that involves summoning a spirit will need to do so outside of Sigil.

I have allowed people to use summon spells in Sigil, but they always get something already in the city itself - something similar to the creature they were after if the exact thing isn't available.

There are other problems, however ... for example intelligent beings may feel compelled to come to the player's aid, but that doesn't mean they are actually controlled by the magic ... I tend to play it more like a "Friends" spell, where the creature feels ablidged to help, but may expect something in return once the spell ends. Individuals who are well compensated are more likely to return again when called, while those who are not may become unpleasant to deal with. (just how unpleasant is up the GM ... me, I tend to use this as a roleplaying tool and occasional story hook)

I don't think there's any magical enforcement of "keeping the peace", at least in the sense you seem to be using it. Various laws in Sigil might prohibit summoning sentient or domesticated creatures, for the reason you listed, but I don't think it should be impossible.

I always saw this restriction as an unnecessary nerf on a single school of magic, especially if a player likes to play a Conjurer specialist mage. So, it's OK for an Evoker to blast things left and right with Fireballs, but a Conjurer can't call up a temporary guard dog? Maybe "Summon" Monster is a misnomer; looking at the specialist title, I'd rather think they Conjure up temporary copies of real creatures. I mean, otherwise it would be somewhat evil of a mage to on a whim summon an actual creature to be maimed and/or killed when it was just wandering about minding its own business. So, these Conjured copies are made up of bits of matter/energy from whatever place the spell is cast and the energy of the spell itself. After the spell expires or the Conjured creature "dies" these components disperse back into the plane. So in the end, the Lady's rules aren't broken, since there is no actual summoning involved.

I thought I read something like this on how "Elementals" are "Summoned" to the Outer Planes, despite the lack of connection to the Inner Planes. This was the explanation before the Ordial plane was posited anyway.

Yeah, the mad fireball tossing was a bit of an extreme example on my point... How about an Enchanter charming his way wantonly up the social ladder? There's no real restriction on them, not the same kind of repercussions from the Lady anyway.

All things in moderation, I say, so high level Summon spells may be out. But I still say it's not fair to totally single Conjurers' main line of spells out like this, and at least some should be allowed, possibly all if you go by my [conjured-creature-isn't-real] variation above. Finally, a summoned creature cannot use any innate summoning abilities it may have, so even the real summoned ones can't call in more - therefore no worries of an exponential summon horde.

They are a threat to the populace of Sigil, considering how much damage a Hydra or a Huge Elemental could do before being put down. Logistically you just don't want those things rampaging through your city. At least the Balor, Epic Characters, and Great Worms are intelligent and free willed enough not to go about causing random devastation - for fear of the Lady among other things - summoned creatures suffer under no such restraint.

The Summon Monster spells specifically bring in creatures from other planes. This renders them inoperable within Sigil. If summoned creatures are ordered to pass through a portal into Sigil the spell for those particular creatures ends, as if they were slain before the end of the spells duration. Other creatures summoned by the same spell who do not pass the portal remain ntil the end of the spell.
This is akin to forcing a protection spell against a hedged creature.
Only living creatures, and petitioners who have formed bodies are bound by the Lady's astral barrier. Fresh spirits which have not yet fromed into petitioners pass towards their destination plane.

I see the summon monster spell as something of a magical contract. The spell expends energy to import creatures across a planer boundry, creating a tension which relaxes at the spell's end, returning them home. Crossing a second planer boundry strecthes the tension to thin, and it snaps, and the "contract" is broken.
If summoned creatures are killed, they return to where they came from unharmed. Indeed Player Characters who are Planars (buy not Primes) can be struck by spell crystals and summoned thus. The Abyss chapter of the great modron march module has an example of this.
I see these creatures when summoned, as being akin to an astral projection. A projection of sorts would explain why they are not killed when slain while under the spell, merely returned to the place of origin, the way a slain astral projector would be. This is also along the lines of creatures which can only be killed on their home plane. The projection which enters other planes is not really their true body.