Judicial review under Section 34 of the Arbitration and Conciliation Act requires addressing specific challenges raised, rather than merely stating limited scope for interference.

JUDGEMENT :

(PER : A. S. CHANDURKAR, J.)

1. This Commercial Arbitration Appeal filed under Section 37 (1) (c) of the Arbitration and Conciliation Act, 1996 (for short, ‘Act of 1996’) raises a challenge to the judgment dated 22/04/2024 passed by the learned District Judge-2, Pune in Civil Miscellaneous Application No.1337 of 2019. By the said judgment, the application preferred by the appellant under Section 34 of the Act of 1996 challenging the award dated 12/02/2019 passed by the learned Arbitrator came to be dismissed. As a result, the said award was upheld.

Admit. The Commercial Arbitration Appeal is taken up for final disposal.

2. The appellant (hereinafter referred to as ‘NAFED’) and the first respondent (hereinafter referred to as ‘REPL’) entered into two Tie Up Agreements dated 24/03/2004 and 30/04/2004 on the basis of which NAFED agreed to extend financial assistance to REPL to the extent of 80% of the value of stock that was to be procured by REPL. The balance 20% value of the stock was to be procured by NAFED. On differences arising between the said parties, NAFED invoked the arbitration clause by its letter dated 17/03/2008. The disputes were referred to the sole Arbitrator who by his award dated 12/02/2019 dismissed the claim raised by NAFED as made against the first respondent. He further held the claim made against the second and third respondent to be not maintainable in the absence of any arbitration agreement between the parties. The counter claim filed by REPL came to be allowed and NAFED was directed to pay an amount of Rs. 33,97,77,369/- with interest. This award was the subject matter of challenge by NAFED in proceedings filed under Section 34 of the Act of 1996. By the impugned judgment dated 22/04/2024, the application filed under Section 34 of the Act of 1996 came to be dismissed.

3. Dr. Veerendra Tulzapurkar, learned Senior Advocate for NAFED in support of the appeal at the outset submitted that insofar as the findings recorded against Issue nos.1 and 2 by the learned Arbitrator were concerned, the same were not under challenge. The award as passed in favour of REPL was under challenge. Inviting attention to the impugned judgment dated 22/04/2024, it was submitted that though NAFED raised various contentions by submitting its written note of arguments, the grounds raised by it were not considered at all. Only by observing that the learned Arbitrator had passed his award on the basis of material on record, the learned Judge proceeded to dismiss the application filed under Section 34 of the Act of 1996. It was urged that the learned Judge ought to have considered the specific grounds raised by NAFED especially as regards the nature of Tie Up Agreements. It was submitted that the Tie Up Agreements indicated that the relationship between the parties were that of a lender and borrower. The learned Arbitrator erred in recording a finding that the Tie Up Agreements were in the nature of a joint venture or akin to a partnership. The relevant clause of the Tie Up Agreements along with various letters exchanged between the parties clearly indicated that the Tie Up Agreements were in the nature of a loan/finance agreement. A specific ground raised by NAFED in that regard before the learned Judge was not considered in the proper perspective only on the premise that the scope to challenge the arbitral award was limited. NAFED’s contentions based on the documents on record had not been considered. It was submitted that the powers conferred under Section 37 of the Act of 1996 were similar to the powers conferred under Section 34 of the Act of 1996 while considering a challenge to an arbitral award. Reliance was placed on the decision in Delhi Metro Rail Corporation Ltd. Vs. Delhi Airport Metro Express Pvt. Ltd. 2024 SCC OnLine 522 . In the light of the finding recorded by the learned Arbitrator against Issue no.4, it was necessary for the learned Judge to have considered the challenge within the limits permissible under