Court has minimal scope of interference under Section 34 of A&C Act where tribunal’s award based on findings of fact

Delhi High Court: A Division Bench comprising of A.K. Chawla and S. Ravindra Bhat, JJ. ruled that Single Judge of the High Court could not have justly interfered with the arbitral award passed by the tribunal which was primarily based on findings of fact.

The appellant was aggrieved by the judgment of the Single Judge who upheld the objections of the respondent under Section 34 of the Arbitration and Conciliation Act, 1996 against the arbitral tribunal’s award.

The parties entered into a contract for construction work. The work was to be executed by the appellant as per the terms of the work order. Dispute arose between the parties regarding the payments relating to the contract. On an application moved by the appellant under Section 11, the Court appointed an arbitrator. The arbitration agreement itself was earlier disputed by the respondent but the arbitrator, as well as the Single Judge, consistently ruled in favour of its existence. The arbitrator in his award, party allowed a claim of the appellant. The award was challenged by the respondent by filing objections under Section 34. The Single Judge allowed the objections ad set aside the award. Aggrieved thereby, the appellant preferred the present appeal under Section 37.

Raghvendra M. Bajaj, Advocate led contentions on behalf of the appellant and relied on a series of e-mails and letters exchanged between the parties to support its claim. The respondent was represented by Amit Mahajan, Advocate. It is pertinent to note that the tribunal gave its award after perusing such correspondence; while the Single Judge assumed that only the written contract entered into between the parties was to be considered.

The High Court referred to Associate Builders v. DDA, (2015) 3 SCC 49, wherein the Supreme Court cautioned that under Section 34, the courts should not set aside arbitral award merely because they do not agree with interpretation of the agreement given by the arbitrator, rather it has to be shown that tribunal’s findings were based on no evidence or irrelevant evidence or was perverse. In the present case, the findings of the tribunal were pursuant to a process of reasoning and discussion and analysis of evidence and documents presented before it. It was observed that in such case, the scope of interference under Section 34 was minimal. The court held that the Single Judge could not have justly interfered with the award. Consequently, the appeal was allowed and the impugned judgment was set aside. [Wishwa Mittar Bajaj and Sons v. Shipra Estate Ltd. and Jaikishan Estates Developers (P) Ltd., 2018 SCC OnLine Del 12918, dated 14-12-2018]

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