Arbitration Awards cannot Not set side merely because there is potential of an alternative view regarding facts or contract interpretation : Supreme Court
The Supreme Court observed that mere speculation about alternative viewpoints on facts or contract interpretation is insufficient grounds to nullify arbitration awards. The Court clarified that the authority granted by Section 34 of the Arbitration and Conciliation Act is specifically invoked to scrutinize instances where the Arbitral Tribunal's decision is unreasonably irrational or manifestly biased. This observation was made by a bench comprising Chief Justice DY Chandrachud and Justices PS Narasimha and JB Pardiwala.
The context of this observation arose from a case involving the Chenab Bridge Project Undertaking and Konkan Railway Corporation Limited. The Arbitral Tribunal dismissed all claims presented by the former against the latter. The initial judgment by a Single Judge of the Bombay High Court upheld the arbitration award and rejected the challenge lodged under Section 34 of the Act. However, upon appeal under Section 37 of the Act, the High Court's Division Bench partially granted the appeal.
In its evaluation of the case, the Supreme Court highlighted that the scope of review in a Section 37 appeal closely mirrors that of a Section 34 challenge. Both are limited to specific grounds, with the intention of safeguarding against decisions that are outrageously irrational. The Court stressed that this review mechanism doesn't permit a reexamination of contractual clauses or terms. The Division Bench of the High Court made an error by attempting to reinterpret a contractual clause within the framework of a Section 37 appeal, when such reinterpretation is beyond the permissible scope of such jurisdiction.