The Delhi High Court dismissed an appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996 read with Section 13 of the Commercial Courts Act, 2015, against an Order, vide which the challenge to an Award under Section 34 of the Act,1996, was allowed and the Arbitral Award was set aside. The Court observed that the scope of a challenge under Section 34 and Section 37 of the Arbitration & Conciliation Act, 1996 is limited to the grounds stipulated in Section 34.
Brief Facts:
The dispute essentially was around the increase in the quantum of Minimum Wages payable to the labour, during the course of execution of the contract. The appellant filed a claim asserting that the increase in minimum wages could not have been foreseen and that an additional cost was occasioned thereupon, which was not taken into account while tendering. The appellant sought an amount of Rs.66.03 Crores plus interest. The Award was made in favour of the appellant in the sum of Rs. 27.42 crores with interest, by observing that the respondent had incurred a total expenditure of Rs.77.26 crores. Aggrieved by the Award, the respondent herein preferred a petition under Section 34 of the Act, 1996, to challenge the arbitral award, which was allowed. Hence, the present appeal.
Contentions of the Appellant:
The Learned Counsel for the Appellant submitted that the scope of interference in an Arbitral Award under Section 34 of the Act, 1996, is limited, and entering into the merits of the decision based on some material has been held to be beyond the scope of the provision. It was argued that the re-appreciation of evidence to come to a contrary conclusion is the domain of the Appellate Court and cannot be done by the Courts while exercising the jurisdiction under Section 34 of the Act, 1996.
Observations of the Court:
The Court noted that the scope of a challenge under Section 34 and Section 37 of the Arbitration & Conciliation Act, 1996 is limited to the grounds stipulated in Section 34. It is open to the court to consider whether an Award is against the specific terms of the contract, and if so, interfere with it on the ground that it is patently illegal and opposed to the public policy of India.
The Court observed that a finding based on no evidence at all or an award that ignores vital evidence in arriving at its decision would be perverse and liable to be set aside on the grounds of patent illegality. An award based on no evidence, or passed in ignorance of vital evidence, will be perverse.
The decision of the Court:
The Delhi High Court, dismissing the appeal, held that the Arbitral Award was rightly set aside by the learned Single Judge on well-substantiated reason and logic, as being without any evidence and hence, perverse.
Case Title: M/s Jaiprakash Hyundai Consortium v M/s Satluj Jal Vidyut Nigam Ltd. & Anr.
Coram: Hon’ble Mr. Justice Suresh Kumar Kait and Hon’ble Mrs. Justice Neena Bansal Krishna
Case No.: FAO(OS) (COMM) 214/2023 & CAV. 523/2023
Advocate for the Appellant: Mr. Amarjit Singh Chandhiok, Sr Adv., with Mr. Aman Anand, Mr. Aman Dixit, Ms. Natasha Debroy, Ms. Simran Kohli & Ms. Vidushi Keshan, Advocates.
Advocate for the Respondents: Mr. Sanjay Jain Sr. Advocate with Mr. Uttam Datt, Ms. Sonakshi Singh, Mr. Yuvraj Sharma, Mr. Nishank Tripathi, Ms. Harshita Sukhija & Mr. Kumar Bhaskar, Advocates.
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