Orissa High Court
Mahanadi Coalfields Limited & vs Jalaram Transport on 9 May, 2025
Author: S.K. Panigrahi
Bench: S.K. Panigrahi
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Location: ORISSA HIGH COURT, CUTTACK
Date: 15-May-2025 19:30:49
IN THE HIGH COURT OF ORISSA AT CUTTACK
ARBA No.20 of 2017
Along with
ARBA Nos.21, 22 and 23 of 2017.
(From the Judgment dated 11.10.2017 passed by the Learned District
Judge, Jharsuguda in Arbitration Petition No. 2 of 2016 arising out of
arbitration award dated 01.03.2016 passed by the Ld. Sole Arbitrator
Retd. Justice A.S.Naidu)
(In ARBA No.20 of 2017)
Mahanadi Coalfields Limited & .... Appellant (s)
Anr.
-versus-
Jalaram Transport .... Respondent (s)
Advocates appeared in the case through Hybrid Mode:
For Appellant (s) : Mr. S.D. Das,
Senior Advocate along with
Mr.H. Mohanty, Advocate
For Respondent (s) : Mr. A. Patnaik, Advocate
CORAM:
DR. JUSTICE S.K. PANIGRAHI
DATE OF HEARING:-28.02.2025
DATE OF JUDGMENT:-09.05.2025
Dr. S.K. Panigrahi, J.
1. These Appeals under Section 37 of the Arbitration and Conciliation Act,
1996 (hereinafter referred to as “A&C Act”) have been filed seeking
setting aside of the Judgment dated 11.20.2017 passed by the learned
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District Judge, Jharsuguda in Arbitration Petition No. 1 of 2016,
Arbitration Petition No. 2 of 2016, Arbitration Petition No. 3 of 2016 and
Arbitration Petition No. 4 of 2016. Since these Appeals arise from the
similar questions of law and facts and involve similar contentions, the
same were taken up for hearing together and are being dealt with by
this common judgment and order.
I. FACTUAL MATRIX OF THE CASE:
2. The present dispute arises over recovery of excess payment made to the
Respondent Contractors by the Appellant. The Appellant, Mahanadi
Coalfields Limited is a Central Government Public Sector Undertaking
who floated tender, i.e. NIT 287 on 26.12.2002 for transportation of
crushed coal from Samaleswari Open Cast Project, Coal Handling Plant,
hereinafter referred to as “SOCP, CHP” to Lajkur Railway Siding No.I,
II and III of Ib Valley Area, MCL. Lead (distance) mentioned in NIT-287
was 4-5 kms. from SOCP, CHP to Railway Siding No.I & II. The
Respondent Contractors were successful bidders and the Appellant
entered into individual contracts with each of them. On 7.4.2003 letter
of intent was issued to the Respondent Contractors. Work orders were
issued on 2.6.2003. On 23.6.2003, the agreements were signed. Date of
commencement of the work was 27.4.2003. Period of completion of the
work was two years from the date of commencement of the work.
Scheduled date of completion of the work was 26.4.2005. The
Respondent Contractors executed additional quantity of work and the
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time for completion of the additional quantity of the work was extended
twice till 30.4.2006.
3. Internally, without notifying the Respondent Contractors, it was found
that the distances mentioned in the NIT were more than the actual
distance covered by the Respondent Contractors. Therefore, the
Appellants arrived at a decision to recover the excess amounts paid to
the Respondent Contractors as they had allegedly covered less distance
than what was specified in the Agreement. The Appellants accordingly
invoked Clause 16 of the General Terms and Conditions of the Contract
and made recovery of the excess payment by deducting the amounts
from the running bill.
4. Aggrieved, the Respondent Contractors approached this Court vide
W.P.(C) No. 6366/2006, 6367/2006, 6368/2006 and 6369/2006 apart from
four other identically placed contractors also challenging the
deductions so made. This Court vide its order dated 30.3.2010 was
pleased to allow the Writ Petitions and directed the present Appellants
to refund the amounts deducted.
5. Further aggrieved, the Appellant Company preferred SLP No.
17482/2010, 17569/2010, 17619/2010 and 17622/2010 before the Hon’ble
Supreme Court. The Hon’ble Supreme Court vide order dated 10.10.2014
disposed off the Civil Appeal No. 9711/2014 (arising out of SLP No.
17482/2010), Civil Appeal No. 9712/2014 (arising out of SLP No.
17569/2010), Civil Appeal No. 9713/2014 (arising out of SLP No.
17619/2010) and Civil Appeal No. 9714/2014 (arising out of SLP No.
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17622/2010) apart from four other identical appeals holding that this
Court ought not to have interfered when there are disputed questions
of facts involved. Thereafter, the Hon’ble Apex Court was pleased to
appoint Ld. Single Arbitrator, Retd. Justice A. Suryanarayan Naidu to
adjudicate upon the dispute between the Parties.
6. After hearing the parties, the Ld. Sole Arbitrator was pleased to pass his
final award on 1.3.2016 wherein, the Ld. Sole Arbitrator was pleased to
direct the Appellant Company to pay the excess amounts so recovered
to the Respondent Contractors. Here, for the sake of convenience, the
amount awarded in each of the ARBA’s is reproduced in a tabular form:
SL. ARBA NO. Amount awarded under Amount
NO. (Before this the head "Amount awarded towards
Court) Recovered along with litigation costs
Bank Guarantee and
Security Deposit"
1. 20/2017 51,79,296/- 2,27,420/-
With Interest @9% from
6.3.2006, till 1.3.2016 and
interest @ 11% from the
date of the award till
payment is made.
2. 21/2017 22,66,061/- 1,13,186/-
With Interest @9% from
6.3.2006, till 1.3.2016 and
interest @ 11% from the
date of the award till
payment is made.
3. 22/2017 63,79,784/- 1,59,450/-
With Interest @9% from
6.3.2006, till 1.3.2016 and
interest @ 11% from the
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date of the award till
payment is made.
4. 23/2017 55,38,551/- 2,25,637/-
With Interest @9% from
6.3.2006, till 1.3.2016 and
interest @ 11% from the
date of the award till
payment is made.
7. Aggrieved, the Appellant assailed the final award dated 1.3.2016 under
Section 34 of the A&C Act in the Court of the Learned District Judge,
Jharsuguda vide Arbitration Petition No. 1 of 2016, Arbitration Petition
No. 2 of 2016, Arbitration Petition No. 3 of 2016 and Arbitration Petition
No. 4 of 2016 respectively. Vide separate judgments all dated 11.10.2017
in Arbitration Petition No. 1 of 2016, Arbitration Petition No. 2 of 2016,
Arbitration Petition No. 3 of 2016 and Arbitration Petition No. 4 of 2016,
the Ld. District Judge, Jharsuguda was pleased to dismiss the same
upon arriving at the conclusion that the award was not in violation of
the public policy of India, did not contain any plausible fact that would
shock the conscience of the court and did not have any patent illegality
on the face of the record.
8. Aggrieved by the judgments dated 11.10.2017 in Arbitration Petition
No. 1 of 2016, Arbitration Petition No. 2 of 2016, Arbitration Petition No.
3 of 2016 and Arbitration Petition No. 4 of 2016, the instant Appeals
have been preferred. As the facts leading up to the instant Appeal have
been laid down, this Court shall endeavour to summarise the
contentions of the Parties and the broad grounds that have been raised
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to seek the exercise of this Court’s limited jurisdiction available under
S. 37 of the A&C Act.
II. APPELLANT’S SUBMISSIONS:
9. The Ld. Counsel for the Appellant assails the arbitral award and the
judgment of the learned District Judge, mainly on the ground that the
learned District Judge has completely failed to deal with or cogently
answer the grounds raised by the present appellant in its application
under Section 34 of the A & C Act, 1996, challenging the Award dated
1.3.2016, passed by the Learned Sole Arbitrator, and has disposed of the
matter in a cursory, casual and lackadaisical manner with complete
non-application of mind contrary to the well settled propositions of law
and, hence, both the impugned order and the Final Award are liable to
be set aside.
10.It is also contended that the Ld. District Judge being the final court on
facts did not take into account the alleged errors in facts that had been
committed by the Ld. Arbitrator and therefore by allegedly relying on
the erroneous findings of the Ld. Arbitrator, the Ld. District Judge has
committed gross illegality and such a judgment is liable to be interfered
with and set aside.
III. RESPONDENT’S SUBMISSIONS:
11.Per contra, Learned Counsels for the present Respondent contends that
the Appellant has not been able to showcase any reasonable ground for
interfering with the impugned judgment apart from making bald
statements towards the same. It was vehemently submitted that the
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Date: 15-May-2025 19:30:49scope of interference of this Court in an application u/s Section 37 of the
A&C Act is extremely limited and this Court cannot reappreciate
evidence at this stage, therefore it may not revisit the factual findings of
the Ld. Tribunal apart from testing the same on the mantle of
reasonableness. It was also submitted that the Ld. District Judge had
considered all the material aspects of the contentions raised by the
parties and also duly regarded their submissions thereby warranting no
interference with the concurrent views of the Ld. Arbitral Tribunal as
well as the Ld. District Judge.
12.It is submitted that the award is based on appreciation of the
material and evidence that were placed before the arbitrator and it is
not open in these proceedings to re-appraise the same. It is thus prayed
that the present appeal be dismissed.
IV. ISSUES FOR CONSIDERATION
13.Having heard the parties and perused the materials available on record,
this court here has identified the following issues to be determined:
A. Whether this Court should interfere with the impugned order
given the narrow scope of its powers under Section 37 of the A&C
Act?
V. ISSUE A: WHETHER THIS COURT SHOULD INTERFERE WITH
THE IMPUGNED ORDER GIVEN THE NARROW SCOPE OF ITS
POWERS UNDER SECTION 37 OF THE A&C ACT?
14. It is trite in law that whilst exercising power under Section 34 of the
1996 Act the Court does not sit in appeal over the arbitral award.
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Interference with an arbitral award is only on limited grounds as set out
in Section 34 of the 1996 Act. A possible view by the arbitrator on facts
is to be respected as the arbitrator is the ultimate master of the quantity
and quality of evidence to be relied upon. It is only when an arbitral
award could be categorized as perverse, that on an error of fact an
arbitral award may be set aside. Further, a mere erroneous application
of the law or wrong appreciation of evidence by itself is not a ground to
set aside an award as is clear from the provisions of subsection (2-A) of
Section 34 of the 1996 Act.
15.In Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd.1, a three-Judge
Bench of the Hon’ble Supreme Court held that Courts need to be
cognizant of the fact that arbitral awards are not to be interfered with in
a casual and cavalier manner, unless the court concludes that the
perversity of the award goes to the root of the matter and there is no
possibility of an alternative interpretation that may sustain the arbitral
award. It was observed that jurisdiction under Section 34 cannot be
equated with the normal appellate jurisdiction. Rather, the approach
ought to be to respect the finality of the arbitral award as well as party’s
autonomy to get their dispute adjudicated by an alternative forum as
provided under the law.
16.It is also a settled proposition that errors of fact cannot be corrected by
the court while exercising the jurisdiction under Section 34 of the A&C
1
(2019) 20 SCC 1
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Act as it does not sit in appeal over the award. In Parsa Kente Collieries
Ltd. v. Rajasthan Rajya Vidyut Utpadan Nigam Ltd.2, it was further
inter alia held that a possible view by the Arbitrator on facts has
necessarily to pass muster as the Arbitrator is the ultimate master of the
quantity and quality of evidence to be relied upon when he delivers his
arbitral award. It was further observed that thus an award based on
little evidence or on evidence which does not measure up in quality to
a trained legal mind would not be held to be invalid on this score.
Reliance can also be placed upon NHAI v. ITD Cementation (India)
Ltd.3, and SAIL v. Gupta Brother Steel Tubes Ltd.4. The view was
reiterated in Dyna Technologies (P) Ltd. (supra) wherein it was inter alia
held that the courts should not interfere with an award merely because
an alternative view on facts and interpretation of contract exists. It was
reminded that the court should defer to the view taken by the Arbitral
Tribunal even if the reasoning provided in the award is implied unless
such an award portrays perversity unpardonable under Section 34 of
the A&C Act. In South East Asia Marine Engg. & Constructions Ltd.
[SEAMAC Limited] v. Oil India Ltd.5 , it was inter alia held that the
courts should not interfere with an award merely because an alternative
view on facts and interpretation of the contract exists.
2
(2019) 7 SCC 236
3
(2015) 14 SCC 21
4
(2009) 10 SCC 63
5
(2020) 5 SCC 164
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17.This Court also places further reliance on the Hon’ble Apex Court’s
judgment in Madnani Construction Corpn. (P) Ltd. v. Union of India6
wherein it was held that:
“20. It is well settled that the arbitrator is the master of facts.
When the arbitrator on the basis of record and materials
which are placed before him by the Railways came to such
specific findings and which have not been stigmatised as
perverse by the High Court, the High Court in reaching its
conclusions cannot ignore those findings. But it appears that
in the instant case, the High Court has come to the aforesaid
finding that the items mentioned above are excepted matters
and non-arbitrable by completely ignoring the factual finding
by the arbitrator and without holding that those findings are
perverse.”
18.Where Section 34 is concerned, the position is well settled by now that
the court does not sit in appeal over the arbitral award and may
interfere on merits on the limited ground provided under Section
34(2)(b)(ii) i.e. if the award is against the public policy of India. As per
the legal position clarified through decisions of this Court prior to the
amendments to the 1996 Act in 2015, a violation of Indian public policy,
in turn, includes a violation of the fundamental policy of Indian law, a
violation of the interest of India, conflict with justice or morality, and
the existence of patent illegality in the arbitral award. Additionally, the
concept of the ‘fundamental policy of Indian law’ would cover
compliance with statutes and judicial precedents, adopting a judicial
6
(2010) 1 SCC 549
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approach, compliance with the principles of natural justice,
and reasonableness.
19.It is only if one of these conditions is met that the court may interfere
with an arbitral award in terms of Section 34(2)(b)(ii), but such
interference does not entail a review of the merits of the dispute, and is
limited to situations where the findings of the arbitrator are arbitrary,
capricious or perverse, or when the conscience of the court is shocked,
or when the illegality is not trivial but goes to the root of the matter. An
arbitral award may not be interfered with if the view taken by the
arbitrator is a possible view based on facts.
20.Therefore, to reiterate, the scope of interference in proceedings under
Section 34 of the Arbitration and Conciliation Act, 1996 has been laid
down by the courts time and time again, more recently summarised in
the judgment of the Hon’ble Delhi High Court in Indian Railways
Catering and Tourism Corp Ltd. v. Brandavan Foods Products7. The
operative portion of which reads as under:
“42. The scope of examination of an arbitral award under
Section 34 of the Act can be traced, more significantly so,
in Associate Builders v. DDA, 2024 : DHC : 6114 O.M.P.
(COMM) 495/2022 & Conn. matters (2015) 3 SCC 49,
Ssangyong Engg. & Construction Co. Ltd. v. NHAI, (2019)
15 SCC 131and Delhi Airport Metro Express (P)
Ltd. v. DMRC, (2022) 1 SCC 131. Reliance is also placed
upon, inter alia, Dyna Technologies (P) Ltd. v.Crompton
Greaves Ltd. (2019) 20 SCC 1; UHL Power Co. Ltd. v. State7
2024 : DHC : 6114Page 11 of 21
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Date: 15-May-2025 19:30:49of H.P. (2022) 4 SCC 116; South East Asia Marine
Engineering & Constructions Ltd. v. Oil India Ltd. (2020) 5
SCC 164; Patel Engineering Ltd. v.North Eastern Electric
Power Corporation Ltd. (2020) 7 SCC 167; PSA SICAL
Terminals (P) Ltd. v. Board of Trustees of V.O.
Chidambranar Port Trust Tuticorin, 2021 SCC OnLine SC
508; and Army Welfare Housing Organisation v. Sumangal
Services (P) Ltd. (2004) 9 SCC 619.
43. For the sake of brevity, the principles delineated in the
aforesaid cases are summarised hereinafter.
44. The award can be set aside on the ground of patent
illegality if : a) the view taken by the arbitral tribunal is
impossible or such that no reasonable person could arrive at
it; b) if the arbitral tribunal exceeds its jurisdiction by going
beyond the contract, and adjudicating upon issues not
referred to it; c) the finding of the arbitral tribunal is based
on no evidence or it ignores material evidence. Rewriting of
contractual terms by the Arbitrator is completely prohibited,
and an Award which suffers from such perversity is liable to
be set aside. The illegality must go to the root of the matter
and does not include mere erroneous application of law or a
contravention of law which is unrelated to public policy or
public interest. If two views are possible, the Court will not
interfere with the view of the arbitral tribunal if it has taken
one of the two views. Reappreciation of evidence is also
impermissible.
45. The award can also be set aside on the ground of it being
in contravention with public policy of India, the scope of
which includes : a) fraud or corruption; b) violation of
Sections 75 and 81 of the Act; c) any contravention with the
fundamental policy of Indian law; d) violation of the most
basic notions of justice or morality, so as to shock the
conscience of the Court. The Court does not function as a
Court of appeal, and errors of fact cannot be corrected. The
arbitrator’s findings on facts must be accepted, as
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the arbitrator is the ultimate master of the quantity and
quality of evidence in making the award.
46. It is also relevant to note that the Court cannot modify or
rewrite the Award, and can only set it aside, post which the
parties can re-initiate arbitration proceedings, if they so
choose. However, partial setting aside is valid and justified,
if the part proposed to be annulled is independent and can be
removed without affecting the rest of the award. For this,
reliance is placed upon McDermott International
Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181; S.V.
Samudram v. State of Karnataka (2024) 3 SCC
623 and National Highways Authority of India v. Trichy
Thanjavur Expressway Ltd. 2023 SCC OnLine Del 5183.”
21.Moreover, on the aspect of the Ld. Arbitrator being the master of facts,
the Supreme Court has recently in NTPC Ltd. v. Deconar Services (P)
Ltd.8, has held as under:
“12. Further, it is also a settled proposition that where the
arbitrator has taken a possible view, although a different view
may be possible on the same evidence, the court would not
interfere with the award. This Court in Arosan Enterprises
Ltd. v. Union of India [Arosan Enterprises Ltd. v. Union of
India, (1999) 9 SCC 449], held as follows : (SCC p. 475, paras
36-37)
“36. Be it noted that by reason of a long catena of cases, it is
now a well-settled principle of law that reappraisal of
evidence by the court is not permissible and as a matter of fact
exercise of power by the court to reappraise the evidence is
unknown to proceedings under Section 30 of the Arbitration
Act. In the event of there being no reasons in the award,
question of interference of the court would not arise at all. In8
(2021) 19 SCC 694Page 13 of 21
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still be not available within the jurisdiction of the court
unless of course, there exist a total perversity in the award or
the judgment is based on a wrong proposition of law. In the
event however two views are possible on a question of law as
well, the court would not be justified in interfering with the
award.
37. The common phraseology “error apparent on the face of
the record does not itself, however, mean and imply closer
scrutiny of the merits of documents and materials on record.
The court as a matter of fact, cannot substitute its evaluation
and come to the conclusion that the arbitrator had acted
contrary to the bargain between the parties. If the view of the
arbitrator is a possible view the award or the reasoning
contained therein cannot be examined.”
22.It is no longer res integra that the scope for interference in an appeal
under Section 37 of the Act is narrow. In order to succeed, the Appellant
must establish that the finding of the arbitrator is based on no evidence
or the arbitrator has taken into account material which is irrelevant or
has ignored vital evidence.
23.This Court also notes that it has been repeatedly held that while
entertaining appeals under Section 37 of the Act, the court is not actually
sitting as a court of appeal over the award of the Arbitral Tribunal and
therefore, the court would not reappreciate or reassess the evidence.
The position of law stands crystallised today, that findings, of fact as
well as of law, of the arbitrator/Arbitral Tribunal are ordinarily not
amenable to interference either under Sections 34 or Section 37 of the
Act. The scope of interference is only where the finding of the tribunal
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is either contrary to the terms of the contract between the parties, or, ex
facie, perverse, that interference, by this Court, is absolutely necessary.
The arbitrator Tribunal is the final arbiter on facts as well as in law, and
even errors, factual or legal, which stop short of perversity, do not merit
interference under Section 34 or Section 37 of the Act.
24.While deciding an appeal it must be kept in mind that the arbitrator
Tribunal is the final arbiter on facts as well as law, and even errors,
factual or legal, which stop short of perversity, do not merit interference
under Section 34 or Section 37 of the Act. The Hon’ble Supreme Court
of India has consistently held that an arbitration award should not be
lightly interfered with. In this regard we may place reliance on the
Hon’ble Apex Court’s judgments in Renusagar Power Co.
Ltd. v. General Electric Co.9; ONGC v. Saw Pipes Ltd.10; Hindustan Zinc
Ltd. v. Friends Coal Carbonisation11 and Associate Builders v. DDA12.
25.The scope of judicial scrutiny and interference by an appellate court
under Section 37 of the Act is even more restricted, than while deciding
a petition under Section 34 of the Act. The Hon’ble Supreme Court
in McDermott International Inc. v. Burn Standard Co. Ltd.13 held as
under:
9
1994 Supp (1) SCC 644
10
(2003) 5 SCC 705
11
(2006) 4 SCC 445
12
(2015) 3 SCC 49
13
(2006) 11 SCC 181Page 15 of 21
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Date: 15-May-2025 19:30:49“52. The 1996 Act makes provision for the supervisory role
of courts, for the review of the arbitral award only to ensure
fairness. Intervention of the court is envisaged in few
circumstances only, like, in case of fraud or bias by the
arbitrators, violation of natural justice, etc. The court cannot
correct errors of the arbitrators. It can only quash the award
leaving the parties free to begin the arbitration again if it is
desired. So, scheme of the provision aims at keeping the
supervisory role of the court at minimum level and this can
be justified as parties to the agreement make a conscious
decision to exclude the court’s jurisdiction by opting for
arbitration as they prefer the expediency and finality offered
by it’.”
26.It is also settled law that the courts cannot travel beyond the scope of
Section 34 in an appeal under Section 37 from an order of the court in
an application preferred by a party to set aside an arbitral award under
Section 34 of the A&C Act as has been laid down by the Supreme Court
in MMTC Ltd. v. Vedanta Ltd.14 where the Apex Court held:
“14. As far as interference with an order made under Section
34, as per Section 37, is concerned, it cannot be disputed that
such interference under Section 37 cannot travel beyond the
restrictions laid down under Section 34. In other words, the
court cannot undertake an independent assessment of the
merits of the award, and must only ascertain that the exercise
of power by the court under Section 34 has not exceeded the
scope of the provision. Thus, it is evident that in case an
arbitral award has been confirmed by the court under Section
34 and by the court in an appeal under Section 37, this Court
must be extremely cautious and slow to disturb such
concurrent findings.”
14
(2019) 4 SCC 163
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27.Section 34 of the Act makes provision for the supervisory role of courts
for review of arbitral award only to ensure fairness. Intervention of the
court is envisaged in few circumstances only, like, when an award is in
conflict with the public policy of India, which includes cases of fraud,
breach of fundamental policy of Indian law and breach of public
morality. The other ground provided under Section 34 is patent
illegality. It specifically provides that an award cannot be set aside on
the ground of erroneous application of law or on re-appreciation of fact.
In the decision of McDermott International Inc. v. Burn Standard Co.
Ltd. (supra), a reference was made to the decision of U.P. State
Handloom Corpn. Ltd. v. Asha Lata Talwar15 and it was observed that
under Section 34 of the Act of 1996 there is a departure from the scheme
of Section 16 in the 1940 Act where perhaps the court was given wider
amplitude of powers. The Apex Court interpreted the scope of
interference under Section 34 and observed that the court cannot correct
errors of the arbitrators. It can only quash the award leaving the parties
free to begin the arbitration again if it is desired. The scheme of the
provision aims at keeping the supervisory role of the court at minimum
level and this can be justified as parties to the agreement make a
conscious decision to exclude the court’s jurisdiction by opting for
arbitration as they prefer the expediency and finality offered by it.
Under Section 34(2) of the Act 1996 the court is empowered to set aside
an arbitral award on the grounds specified therein. There is no specific
15
2009 SCC OnLine All 624
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power granted to the court to itself allow the claims originally made
before the Arbitral Tribunal where it finds the Arbitral Tribunal erred
in rejecting such claims. If such a power is recognised as falling within
the ambit of Section 34(4) of the Act, then the court would be acting no
different from an appellate court which would be contrary to the
legislative intent of the Section 34 of the Act, 1996. The court shall
decline to decide the claim that had been rejected even if wrongly so by
the learned Arbitrator.
28.In the decision of Dyna Technologies (P) Ltd. v. Cromption Greaves
Ltd.16, the Supreme Court noted that only when there is complete
perversity in the reasoning then it can be challenged under the
provisions of Section 34 of the Act. The power vested under Section
34(4) of the Act, 1996 to cure defects can be utilised in cases where the
arbitral award does not provide any reasoning or if the award has some
gap in the reasoning or otherwise and that can be cured so as to avoid
the challenge based on the aforesaid curable defects under Section 34 of
the Act.
29.It is well recognized in Arbitration jurisprudence that the scope of
interference by the Courts in arbitration proceedings and arbitral
awards is narrow and that the Courts ought to be cautious and
circumspect in interfering with any award which is passed by an
arbitral tribunal which has been appointed pursuant to an agreement
16
(2019) 20 SCC 1
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between the parties to the dispute. The exceptions of the
aforementioned rule finds place in Section 34 and Section 37 of the Act
wherein certain instances have been outlined where the Courts can
interfere with any award passed by arbitral tribunals and set it aside.
This court therefore shall also examine the award with the aforesaid
restrictive mandate of law.
30.Furthermore, this Court is cognizant that Section 37 of the Arbitration
and Conciliation Act provides a statutory forum for appeal, inter alia,
against an order either setting aside or refusing to set aside an arbitral
award under Section 34 of the Act. The scope of such an appeal is
inherently limited to the grounds enumerated under Section 34, thereby
ensuring that the appellate process remains confined to the specific
parameters established by the statute.
31.In view of the foregoing, this Court shall carefully examine the
arguments advanced by the counsel for the Appellant, wherein it is
asserted that the claims upheld by the Arbitrator are inconsistent with
the terms of the contract or that the impugned Award lacks any
supporting material or evidence.
32.Prima facie, a perusal of the impugned judgment and Award
unequivocally demonstrates that the Arbitrator relied upon written
submissions, documentary evidence, and the statements of the parties
involved in the transaction to determine and quantify the claims.
33. The Ld. District Judge has first and foremost taken note of the scope of
its powers under Section 34 of the A&C Act and the settled position of
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law pertaining to the grounds where it may exercise it’s powers which
is in line with the position of law laid down by the Hon’ble Supreme
Court in PSA SICAL Terminals Pvt. Ltd. v. Board of Trustees of V.O.
Chidambranar Port Trust Tuticorin and Ors.17; K. Sugumar and Anr. v.
Hindustan Petroleum Corporation Ltd. & Anr.18; UHL Power Company
Ltd. v. State of Himachal Pradesh19; Sutlej Construction Limited v.
Union Territory of Chandigarh20; Venture Global Engineering v. Satyam
Computer Services Limited and Anr.21 and Patel Engineering Limited v.
North Eastern Electric Power Corporation Limited22.
34.Thereafter, the Ld. District Judge has taken note of the contentions of
the Parties including the law relied upon by either side. Then the Ld.
District Judge applied it’s mind and referring to the findings of the Ld.
Arbitrator has come to the conclusion that the Ld. Arbitrator has arrived
at it’s findings after due consideration of the documents on record, the
agreement and the evidence adduced by the Parties. Such a finding
having being arrived at cannot be trifled with in the absence of a glaring
error as it is trite in law that a finding arrived at by the Ld. Arbitral
Tribunal if plausible, cannot be interfered with.
17
AIR 2021 SC 4661
18
(2020) 12 SCC 539
19
(2022) 4 SCC 116
20
(2018) 1 SCC 718
21
(2010) 8 SCC 660
22
(2020) 7 SCC 167
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35.This Court, therefore, does not find that the order of the Tribunal, as
confirmed by the learned District Judge, is so perverse or suffers from
patent illegality which requires interference.
36.In view of the discussion above, this Court finds no infirmity, illegality
or impropriety in the award and order of the learned District Judge,
which would require interference in the present appeal. Appeal is
accordingly dismissed.
VI. CONCLUSION:
37.Therefore, in light of the discussion above, keeping the settled
principles of law in mind and for the reasons given above, this Court is
of the considered view that the impugned orders as well as the Arbitral
Awards warrant no interference under Section 37 of the A&C Act.
38.The amounts awarded in favour of the Respondent Contractors are
directed to be disbursed in their favour, along with interest accrued,
within a period of four weeks from the date of this judgement/ order.
39.These appeals are disposed of, accordingly. No order as to costs.
40. Interim order, if any, passed earlier in any of the aforesaid Appeals
stands vacated.
(Dr. S.K. Panigrahi)
Judge
Orissa High Court, Cuttack,
Dated the 9th May, 2025/
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