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2024 Supreme(Guj) 1311

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SUNITA AGARWAL, C.J., PRANAV TRIVEDI, J.
Board of Trustees of Deendayal Port - Appellant
Versus
M/S. M. S. Khurana & Anr. - Defendants
R/First Appeal No. 1776 of 2023 With Civil Application (For Stay) No. 1 of 2023
Decided On : 23-07-2024

Advocates Appeared:
For the Appellant : Aishvarya.
For the Defendant : Mr. Nikunt Raval for Vidit S. Sharma.

The court confirmed that judicial interference in arbitral awards is limited to specific grounds, emphasizing respect for the arbitral process and the finality of awards.

Headnote:

Arbitration - First Appeal - Arbitration and Conciliation Act, 1996 - Sections 34, 37 - The court upheld the limited scope of interference in arbitral awards, emphasizing that it cannot reappreciate evidence or interfere unless there is a violation of public policy or patent illegality.

Fact of the Case:

The appellant, a corporate body, challenged an arbitral award favoring a partnership firm regarding a delayed construction project. The award mandated payment for the work completed, which the appellant contested on grounds of non-consideration of delay issues.

Finding of the Court:

The court found that the arbitrator had adequately addressed all issues, including delay, and that the appellant's claims lacked merit. The court reiterated that it cannot interfere with arbitral awards unless specific legal grounds are met.

Issues: Whether the arbitrator failed to consider the delay in execution of the work and whether the court could interfere with the arbitral award under Sections 34 and 37 of the Arbitration Act.

Ratio Decidendi: The court held that it cannot reappreciate evidence or interfere with an arbitral award unless there is a clear violation of public policy or patent illegality, reaffirming the limited scope of judicial review under the Arbitration Act.

Result: The First Appeal is dismissed.

ORDER :

Pranav Trivedi, J.

1. The present First Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 ( hereinafter referred to as the “Act of 1996”) impugn the judgment and order dated 31.12.2022 passed by Additional District Judge, Gandhidham-Kachchh in Civil Misc. Application (Arbitration) No. 23 of 2021, whereby the learned Judge rejected the application filed under Section 34 of the Act of 1996 and confirmed the arbitral award dated 01.03.2013.

2. The relevant facts in the present case are that the appellant is a body Corporate constituted under the Major Port Trust Act, 1963 working under the direct control of Ministry of Shipping, Government of India. The respondent is a Partnership Firm, who was granted with tenderer work by the appellant vide work order dated 13.4.1999 with instructions to commence the work from 28.4.1999. The time-line to complete the same was within 6 months. The work order constitute of Construction of Demolition and dismantling Sheds Nos. 1, 2 and 3 and its connected building and providing facilities in lieu of existing facilities in Cargo Jetty Area. Due to delay in work order, dispute arose between the appellant and the respondent. This resulted into appointment of learned Arbitrator on 28.9.2012 for deciding the dispute in question. The learned Arbitrator concluded the proceedings and published the award on 1.3.2013 and ordered payment of Rs.15,20,306/- along with interest at the rate of 12% till the payment was made. Award dated 1.3.2013 was challenged by way of preferring Civil Misc. Application (Arbitration) No. 23 of 2021 under Section 34 of the Arbitration Act. The learned Court by way of impugned order dated 31.12.2022 dismissed the application which has culminated into filing of the present appeal.

3. We have heard Ms. Aishwarya Gupta, learned advocate for the appellant and Mr. Nikunt Raval, learned advocate holding the brief of Mr. Vidit Sharma, learned advocate for the respondent.

4. Ms. Aishwarya Gupta, learned advocate for the appellant submitted that the contentions as raised by the appellant are not recorded by the learned Arbitrator. There was a specific issue of delay in execution of the work. The appellant has clearly come out with the case that delay in work was not properly addressed by the respondent. It is the case of the appellant that this issue has not been specifically recorded and dealt with by the learned Arbitrator. On this limited point, Ms. Aishwarya Gupta has requested to allow the appeal.

5. Per contra, Mr. Nikunt Raval learned advocate for the respondent has contended that all the claims are dealt with by the learned Arbitrator and subsequently allowed. The contentions raised by the appellant are recorded and specific finding has been given. On the aspect of delay, a specific case is made by the respondent that site was not made available by the appellant. The appellant has not given any specific assertion that the site was indeed made available to the respondents. Therefore, the issues raised by the appellant are baseless and are required to be rejected summarily.

6. Having heard the learned advocates for both the sides and having gone through the record, it can be perused that the sole-arbitrator has framed 8 issues and has specifically given findings on such 8 issues. The sole contention raised by the appellant was on the aspect of delay being not dealt with by the learned Arbitrator. The learned Abitrator has primarily framed first 2 issues on merits, including the issue of delay. There are specific findings given on such issues and the contentions raised by the appellant are considered. Therefore, it cannot be observed that there was perversity in the award passed by the learned Arbitrator. It is trite law that the Court cannot sit in appeal over Arbitral award. It is not permissible to reappreciate the evidence on record. By catena of decision of the Hon'ble Apex Court, the scope of interference under Sections 34 and 37 of the Arbitration Act is ve

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