The judgment of Gujarat High Court in the case of Board of Trustees of Deendayal Port through Executive Engineer (H) v/s M/S. Shantilal B. Patel & Anr.; R/FIRST APPEAL NO. 4628 of 2023, sheds light on the intricacies of arbitration proceedings and the judicial approach towards arbitral awards.
In the instant case, the dispute arose from a contract awarded by the appellant to the respondent contractor, with disagreements regarding the final bill and various claims made by the respondent. The learned Arbitrator issued an award in favour of the respondent, directing payment along with interest. The appellant then challenged this award under Section 34 of the Act, but the Additional District Judge dismissed the application. The same then came to be challenged before Gujarat High Court under Section 37 of the Arbitration and Conciliation Act.
The Hon’ble High Court, in its judgment, emphasized that the scope of interference in arbitral awards is limited under the Act of 1996. The Court held that it cannot re-examine the evidence or merits of the case, and interference with Arbitral Award is only permissible in cases of illegality, irrationality, or perversity in said award. The Court further held that if two views are possible on the interpretation of a contract or document, and the Arbitrator has accepted one view, the award should not be interfered with.
The judgment also highlighted that courts should respect the autonomy of arbitral proceedings and not act as appellate bodies over arbitral awards, while also emphasizing the finality and binding nature of arbitral awards, and promoting the efficiency and effectiveness of alternative dispute resolution mechanisms.
Thus, the Hon’ble Court found no substantial errors in the arbitrator’s reasoning and upheld the validity of the arbitral award.
In conclusion, this judgment highlighted that limited judicial interference in arbitral awards is a cornerstone of the arbitration process, and the courts should not delve into the factual intricacies of the case already decided by the arbitrator. Instead, the role of the court is to ensure that the arbitration process was conducted fairly and in accordance with the law, rather than substituting its judgment for that of the arbitrator.

Author of this article:
Adv. Ravish Bhatt,
Partner, R&D Law Chambers,
Dual Qualified Lawyer Solicitor | International Tax Affiliate

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