JUDGMENT :

(SANJEEV PRAKASH SHARMA, ACJ.)

1. The present Civil Miscellaneous Appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act of 1996’) assails the order dated 20.05.2023 passed by the learned Commercial Court No. 1, Jaipur Metropolitan-II, Jaipur (hereinafter referred to as ‘Commercial Court’) wherein the application filed under Section 34 of the Act of 1996 was allowed and the arbitral award dated 15.01.2021 and additional award dated 05.07.2021 were set aside.

2. Brief facts of the case are that the appellant is a joint venture company incorporated under the Companies Act, 1956 and has its registered office in Jaipur, which was formed with the objective of undertaking the development of the Parsa East and Kanta Basan Coal Block, mining, beneficiation, arranging for transportation and delivery of coal to thermal power stations owned and operated by the respondent, which is an undertaking of the Government of Rajasthan and is engaged in the business of generation and sale of electricity in the state of Rajasthan.

3. On 16.07.2008, the appellant and respondent executed the Coal Mining and Delivery Agreement (hereinafter referred to as ‘CMDA’) (with Addendum dated 22.09.2010 and Supplementary Agreement dated 29.07.2016) for coal block development, mining of coal and its delivery to thermal power stations owned and operated by the respondent. A mining lease was granted by the Government of Chhattisgarh to the respondent on 30.05.2012, wherein mining and supply were being done as per the CMDA. However, owing to cancellation of the allotment by the Apex Court, [Judgment dated 25.08.2014 and order dated 24.09.2014 in Writ Petition (Criminal) No. 120/2012] (and resulting cancellation of mining lease), the Supplementary Agreement was entered into between the parties (pursuant to the respondent’s application under the provisions of the Coal Mines (Special Provisions) Act, 2015) to continue with the terms and conditions of the CMDA.

4. During the operation of this agreement, various disputes pertaining to non-reimbursement (by the respondent) of certain costs borne by the appellant as part of carrying out the operations arose. To resolve the same, the appellant initiated arbitration proceedings against the respondent, culminating in the award dated 15.01.2021 whereby, the learned Arbitrator fully/partially allowed most claims made by the appellant. Thereafter, the appellant preferred an application under Section 33(4) of the Act of 1996 on the ground that the learned Arbitrator did not address the claim pertaining to the additional cost of Rs.66.70 crores incurred by the appellant for land acquisition in four villages. The learned Arbitrator, vide additional award dated 05.07.2021, allowed this claim and awarded interest on the said amount.

5. Thereafter, the respondent filed an application under Section 34 of the Act of 1996 before the learned Commercial Court challenging the award dated 15.01.2021 and additional award dated 05.07.2021. Vide order dated 20.05.2023, the learned Commercial Court allowed the application and set aside the aforementioned award and additional award.

6. Learned Senior Counsel appearing for the appellant submits that the learned Commercial Court has not given any reasons for setting aside the well reasoned awards of the Arbitrator, which were passed after examining all the relevant material and has exceeded the scope of Section 34 of the Act of 1996, which bars the Courts from sitting in appeal over an arbitral award and challenging it on merits, but rather it confines appeals to certain limited grounds enumerated under the said provision, i.e., on grounds of being contrary to public policy, being patently illegal or being perverse. In this regard, the learned Senior Counsel also states that the Arbitrator’s interpretation of a contractual term is to be respected as he is the Sole Judge of law and facts and that the learned Commercial Court has also err