The appellate court affirmed that an arbitral award must demonstrate adequate reasoning connecting evidence to conclusions, without requiring extensive elaboration, to avoid interference under Section 34 of the Arbitration and Conciliation Act.

JUDGMENT :

ANIL KSHETARPAL, J.

1. Through the present Appeal, the Appellant/Claimant assails the correctness of the Judgment and Order dated 06.07.2024 [hereinafter referred to as 'Impugned Judgment'], passed by the learned District Judge [hereinafter referred to as 'LDJ'], whereby the petition filed by the Respondent under Section 34 of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as 'Act of 1996'] came to be allowed.

2. By way of the Impugned Judgment, the LDJ had set aside the Arbitral Award dated 17.11.2022 [hereinafter referred to as 'Arbitral Award'], in terms whereof the Appellant had been awarded, (i) a sum of Rs. 68,92,133.95/- towards the outstanding payment of invoices raised during the years 2013 and 2014; (ii) interest thereon at the rate of 12% per annum from the end of calendar month of the respective invoices until 27.04.2018; (iii) pendente lite interest at the rate of 12% per annum on the awarded amount from 28.04.2018 to 17.11.2022; (iv) post award interest at the rate of 12% per annum, if payment is made within 30 days of the award; failing which, interest at the rate of 18% per annum shall be applicable from the date of award till the actual date of payment; and (iv) costs quantified at Rs. 5,00,000/-.

3. The Appellant contends that the LDJ, while passing the Impugned Judgment, committed a jurisdictional error under Section 34 of the Act of 1996, by substituting its own reasoning for that of the learned Arbitrator, despite having acknowledged that the Arbitral Award was founded on the evidence on record. It is also the case of the Appellant that the Arbitral Award reflects due application of mind, having been arrived at, upon a consideration of the submissions made by the parties and evidence adduced, and as such did not warrant any interference by the LDJ.

4. Accordingly, the issue that falls for consideration before this Court is whether the learned Arbitrator, while passing the Arbitral Award, has given sufficient reasons to justify the conclusion that the Appellant is entitled to the sum awarded along with the interest granted thereon.

BRIEF FACTS:

5. In order to comprehend the issues involved in the present case, relevant facts in brief are required to be noticed.

6. The lis between the parties has its genesis in a commercial dispute concerning a total of 12 unpaid invoices raised by the Appellant pursuant to Property Management Agreement dated 01.12.2011 [hereinafter referred to as 'Agreement'], executed between the parties herein.

7. The Appellant is a private limited company engaged in the provision of real estate and property management services, whereas the Respondent is also a private limited company engaged in the business of outsourced services, operating inter alia from Gurgaon, India. In the year 2011, the Respondent, reposing confidence in the expertise of the Appellant, engaged its services under the Agreement for the management of a commercial project known as Welldone IT Park, Gurgaon.

8. The Agreement was initially executed for a fixed tenure of two years, spanning from 01.01.2011 to 31.12.2012, and was subsequently extended for the year 2013 by issuance of Letter of Intent (LOI) by the Respondent. The project site was handed over to the Respondent only in June 2014, marking the culmination of the on-site responsibilities of the Appellant.

9. It has been the case of the Appellant that it faithfully discharged its contractual