IMPORTANT POINT
Arbitral award can be set aside only if award is against public policy of India.

JUDGMENT :

M.R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 17.07.2018 passed by the High Court of Punjab and Haryana at Chandigarh in F.A.O. No. 1399 of 2015 (O&M), by which the High Court has allowed the said appeal preferred under Section 37 of the Arbitration and Conciliation Act, 1996 (for short, ‘the Arbitration Act’) and has set aside the award dated 17.11.2005 passed by the arbitrator as well as the order dated 25.09.2014 passed by the first appellate Court – Additional District Judge, Chandigarh, the original claimant – respondent before the High Court has preferred the present appeal.

2. The facts leading to the present appeal in a nutshell are as under :

That the appellant herein – Haryana Tourism Limited (for short, ‘Corporation’) invited tenders/quotations for the supply of Aerated Cold Drinks at its Tourist Complexes for the period 15.05.2001 to 14.05.2002. The tender submitted by the respondent herein was accepted by the Corporation. As per the agreement, the respondent-company was supposed to pay a sum of Rs. 20 lakhs on account of Brand Promotion which was required to be spent as per mutual agreement between the parties.

2.1 That the Corporation organised a Mango Mela on 07/08th July, 2001. The Corporation spent a sum of Rs. 1 lakh. Both the parties agreed to hold musical nights. According to the respondent herein, it spent a sum of Rs.13.92 lakhs. However, the appellant-Corporation asked the respondent vide letter dated 20.09.2001 to deposit a sum of Rs. 19 lakhs as sponsorship money. The appellant vide letter dated 17.01.2002 terminated the contract. Dispute arose between the parties. The matter was referred to the sole arbitrator.

2.2 Vide award dated 17.11.2005, the arbitrator directed the respondent to pay a sum of Rs. 9.5 lakhs. The counter claim lodged by the respondent claiming Rs. 13.92 lakhs was dismissed by the arbitrator. The respondent thereafter filed objection petition before Additional District Judge, Chandigarh under Section 34 of the Arbitration Act against the award passed by the arbitrator. Vide order dated 25.09.2014, the Additional District Judge dismissed the appeal/objection petition.

2.3 Feeling aggrieved and dissatisfied with the order passed by Additional District Judge, Chandigarh dismissing the appeal/objection petition under Section 34 of the Arbitration Act, the respondent herein preferred a further appeal before the High Court under Section 37 of the Arbitration Act. By the impugned judgment and order, the High Court has allowed the said appeal by entering into the merits of the claim and has quashed and set aside the award passed by the arbitrator as well as the order passed by Additional District Judge, Chandigarh.

2.4 Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court, the original claimant – Corporation has preferred the present appeal.

3. Shri B.K. Satija, learned Advocate has appeared on behalf of the appellant herein and Shri Kanwal Chaudhary, learned Advocate has appeared on behalf of the respondent herein.

3.1 Shri B.K. Satija, learned Advocate appearing on behalf of the appellant – Corporation has vehemently submitted that the High Court has materially erred in quashing and setting aside the award in exercise of its powers under Section 37 of the Arbitration Act. It is submitted that while quashing and setting aside the award passed by the arbitrator, the High Court has exceeded its jurisdiction under Section 37 of the Arbitration Act.

3.2 It is submitted that the High Court had a very limited scope and/or jurisdiction while deciding the appeal under Section 37 of the Arbitration Act.

3.3 It is submitted that in an appeal under Section 37 of the Arbitration Act, the High Court has no jurisdiction to enter into the merits of the claim awarded by the arbitrator, confirmed by the first appellate Court under Section 34 of the Arbitration Act.

3.4 It is submitted that in the present case, the Hig