The court reaffirmed the limited scope of judicial review of arbitral awards under Sections 34 and 37 of the Arbitration and Conciliation Act, emphasizing that courts cannot reappraise evidence or interfere unless findings are perverse or patently illegal.

JUDGMENT :

(Delivered by the Hon'ble Chief Justice)

Prayer : Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 read with Section 13(1) of the Commercial Courts Act to set aside the order passed by the Commercial Court, Coimbatore, dated 24.8.2023 in A.O.P.No.26 of 2023 confirming the order of the Arbitrator.

Appellant had developed a shopping mall-cum-entertainment complex by name “The Velan Esplanade”. Appellant entered into Leave and License Agreement dated 12.12.2012 with first respondent and has agreed to grant the store space, being Shop No.E2. The license fee for the first year was Rs.85,176/- per month, excluding applicable service tax. The license fee for the second and third years was Rs.93,366/-. After the third year, the license fee was to be increased 15% for every three years.

2. The licensee was liable to pay the license fee, maintenance charges, service tax and all other charges, expenses payable for the licensed premises on and from the date of (a) completion of fit out period of 60 days; or (b) commencement of mall operations by appellant, whichever is later, irrespective of whether the licensee has commenced retail operations of store or not. The license agreement also provided for an initial lock-in period of 18 months. During the lock-in period, only the licensor would be entitled to terminate the agreement for reasons mentioned in the agreement.

3. Appellant handed over possession of shop No.E2 to first respondent for fit out. Disputes arose and first respondent commenced arbitration. Second respondent was the sole arbitrator. First respondent claimed a sum of Rs.44,58,691/- together with interest. Appellant filed a defence denying liability and also filed a counter-claim claiming a sum of Rs.24,46,393/- towards rental and other charges. The Arbitrator passed an award in favour of first respondent holding that first respondent was entitled to refund of a sum of Rs.9,82,800/- that it had paid to appellant as security deposit; and a further sum of Rs.22,79,581/- that first respondent had spent on fit outs and interior works in the shop. First respondent's claim for damages in a sum of Rs.10,00,000/- was reduced to a token sum of Rs.50,000/-. Interest of 9% was granted on the amounts payable. Cost of Rs.50,000/- was also awarded. Appellant's counter-claim for Rs.24,46,393/- towards license fee, maintenance charges, etc., was rejected.

4. The Arbitrator has given a factual finding in the award that the mall was opened on 6.12.2023, nearly one year after the assured date of opening the mall on 2.11.2012, and for that he has relied on the counter filed and the evidence.

5. Against this award, an Arbitration Original Petition was preferred under Section 34 of the Arbitration and Conciliation Act, 1996 (“Act”) before the Commercial Court, Coimbatore, on various grounds. Original Petition came to be rejected by order dated 24.8.2023, impugned in this appeal.

6. In our view, there is no infirmity in the impugned order.

7. The scope of challenge to an arbitral award under Section 34 and the scope of appeal under Section 37 of the Act has been discussed by the Apex Court and other Courts in various matters, but the most recent one is Reliance Infrastructure Limited v. State of Goa, (2024) 1 SCC 479, wherein the Apex Court has considered the earlier decisions in MMTC Ltd v. Vedanta Ltd, (2019) 4 SCC 163; Associate Builders v. DDA, (2015) 3 SCC 49; Ssangyong Engineering and Construction Company Limited v. National Highways Authority of India, (2019) 15 SCC 131; PSA Sical Terminals (P) Ltd v. V.O.Chidambranar Port Trust, (2023) 15 SCC 781; Delhi Airport Metro Express (P) Ltd v. DMRC, (2022) 1 SCC 131; Haryana Tourism Ltd v. Kandhari Beverages Ltd, (2022) 3 SCC 237; UHL Power Co. Ltd v. State of H.P., (2022) 4 SCC 116; and State of Chhattisgarh v. SAL Udyog (P) Ltd, (2022) 2 SCC 275, and held in paragraphs 25 to 33 as under:

“25. Having regard to the contentions urged and the issues raised, it shall also be appo