1. Appeal under Section 37 of the Arbitration and Conciliation Act, 1996, challenging Commercial Court's rejection of objections under Section 34 against an arbitral award. (Para 2 , 3 )
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2026 Supreme(Raj) 673
HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
SANJEEV PRAKASH SHARMA, ACJ., SANGEETA SHARMA, J.
Rajasthan State Ganganagar Sugar Mills Ltd. - Appellant
Versus
M/s Premier Alcobev Pvt. Ltd., Through Its Authorized Signatory Mr. Ashu Malik – Respondent
D.B. Civil Miscellaneous Appeal No. 5329 of 2025
Decided On : 11-02-2026
Advocates Appeared:
For the Appellant : Mr. Vikram Pratap Singh
For the Respondent: Mr. Kamlendra Singh Rathore with Mr. Kamlendra Sihag
For the Appellant : Mr. Vikram Pratap Singh
For the Respondent: Mr. Kamlendra Singh Rathore with Mr. Kamlendra Sihag
Judicial interference with arbitral awards is strictly limited to the grounds specified in Section 34 of the Arbitration and Conciliation Act, 1996. Courts cannot substitute their own view for that of the arbitrator on questions of fact unless the award is perverse or patently illegal.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 34 and 37 - Challenging arbitral award - Scope of interference - Finding on delay as a question of fact - Recourse to a court against an arbitral award is strictly limited to the grounds enumerated under Section 34 - Findings arrived at by the arbitrator after considering evidence and documents cannot be interfered with merely because a different view is possible - Patent illegality and public policy are the primary benchmarks for interference, and the court cannot re-appreciate evidence or substitute its own view for that of the arbitrator. (Paras 4, 5, 6, 7)
(B) Appeal - Scope and ambit - The scope of appeal under Section 37 of the Act is very limited - Objective of the legislation is to minimize supervisory control over the arbitral process - Judicial interference is restricted, and there is no scope to examine the award as if it were a first appeal on merits. (Paras 7, 9)
Facts of the case:
The appellant challenged an order of the Commercial Court which had rejected objections filed under Section 34 of the Act of 1996 and upheld an arbitral award. The dispute pertained to the deduction of a sum of money from a security deposit. The appellant contended that there was a deliberate delay in installments, whereas the arbitrator concluded that the delay in obtaining requisite licenses was not attributable to the claimant.
Findings of Court:
The court found that the determination of whether a delay occurred is a pure question of fact. Since the arbitrator reached a conclusion based on the record, statements, and documents, such a finding does not provide a ground for interference under the limited scope provided by Section 34 of the Act of 1996.
Issues: Whether the findings of an arbitrator on a question of fact regarding delay can be substituted by the court under the limited supervisory jurisdiction provided in Sections 34 and 37 of the Arbitration and Conciliation Act, 1996.
Ratio Decidendi: Judicial interference with an arbitral award is strictly limited to the grounds specified in Section 34 of the Act of 1996. The court cannot substitute its own opinion for that of the arbitrator even if an alternative view is possible, provided the arbitrator's conclusion is based on the record and not perverse, as the goal of the Act is to minimize judicial supervision over the arbitral process.
Result: Appeal dismissed with a cost of Rs.25,000/- to be deposited with the state legal services authority.
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2. Appellant argued Arbitrator and Commercial Court ignored reasons for deducting security deposit due to palpable and deliberate delay in installation by claimant. (Para 3 )
3. Question of delay is pure fact; Arbitrator concluded delay in obtaining licenses not attributable to claimant. Such finding cannot ground interference under Section 34. (Para 4 , 5 , 6 , 7 )
4. Section 34 limits court's interference to enumerated grounds; no reappreciation of evidence or substitution of possible different view; mere erroneous application of law insufficient. (Para 6 , 7 , 8 , 9 )
5. Appeal dismissed with costs of Rs.25,000 to be deposited with Rajasthan State Legal Services Authority; pending applications disposed of. (Para 11 )
6. What is the scope of judicial interference with an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996?
Interference is limited to grounds enumerated in Section 34; court cannot reappreciate evidence or substitute its opinion even if another possible view exists. Scope under Section 37 is equally limited. (Para 5 , 6 , 7 , 8 , 9 )
7. Can a finding of fact on delay by an arbitral tribunal be interfered with under Section 34?
No. A pure question of fact, such as delay, when determined after considering evidence and documents, cannot be a ground for interference under Section 34 unless falling within enumerated grounds. (Para 4 , 5 )
8. Does contravention of substantive law without more constitute a ground to set aside an arbitral award?
No. Mere contravention of substantive law is no longer a ground to set aside an arbitral award; the award must be perverse or violate fundamental policy of Indian law. (Para 8 )
ORDER :
1. Heard.
2. The challenge in this appeal is to the order passed by the learned Commercial Court dated 11.09.2025, whereby the objections raised by the appellant in terms of Section 34 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act of 1996’), were rejected and the award was upheld.
3. Mr. Vikram Pratap Singh, learned counsel for the appellant submits that learned Commercial Court as well as learned Arbitrator have failed to take into consideration the reasons, which were taken into consideration by the appellant for deducting the amount of Rs.38,23,200/-, from the security deposit. It is submitted that there was a palpable and deliberate delay in installment and learned Arbitrator has erred in holding that there was no delay on the part of the claimant.
4. The question whether there has been a delay or not, is a pure question of fact. Learned Arbitrator, after considering the statement and the documents which had come on record, reached to the conclusion that the delay in getting the requisite licenses, cannot be held to be on the claimant’s accounts.
5. Such a finding arrived at, cannot be a ground to interfere in terms of Section 34 of the Act of 1996, which provides as under:
“34. Application for setting aside arbitral award-(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3).
(2) An arbitral award may be set aside by the Court only if-
(a) the party making the application [establishes on the basis of the record of the arbitral tribunal that]-
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
(b) the Court finds that--
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
[Explanation 1.-For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,-
(i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or
(ii) it is in contravention with the fundamental policy of Indian law; or
(iii) it is in conflict with the most basic notions of morality or justice.]
[Explanation 2.-For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.]
[(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:
Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.]
(3) An application for setting as
