The court reaffirmed that judicial intervention in arbitration under Sections 34 and 37 is limited to ensuring no substantial legal errors occurred, emphasizing the importance of respecting the arbitral award's findings.

JUDGMENT :

S.K. PANIGRAHI, J.

1. This Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “A&C Act”) has been filed against the judgment dated 18.05.2023 passed by the learned District Judge, Koraput at Jeypore in Arbitration Proceeding No.1 of 2020 wherein the learned District Judge has dismissed the petition filed under Section 34 of the A&C Act thereby confirming the award dated 17.12.2019 passed by the learned Sole Arbitrator in Arbitration Proceeding No.5 of 2017.

I. FACTUAL MATRIX OF THE CASE:

2. Pursuant to an invitation to tender floated by the present Appellant for execution and completion of the work of Electrical works for Phase-2 Expansion Project of Alumina Refinery at Damonjodi (Orissa). The present Respondent participated in the tender and was declared successful. Formal agreement between the parties was executed on 10.10.2007 with the stipulation that the work in question would be completed within a period of 12 months beginning from 15.9.2007.

3. However, the work could not be completed by the Respondent within the time stipulated i.e. 12 months. As many as 12 extensions were granted by the Appellant and the work was completed by the Respondent on 31.7.2012. The Designated Engineer- in-Charge issued a letter of completion on 1.7.2015 indicating that the work of the Respondent amounted to a total of Rs. 9,53,61,442/- The Engineer-in- Charge recommended payment of the 24th R.A. bill for an outstanding amount of Rs. 1,59,40,585 subject to statutory deductions and other legal recoveries to be decided by the present Appellant. Soon thereafter, the Appellant replied vide letter dated 30.9.2015 that this recommended amount was tentative and several deductions towards liquidated damages, cost of unreturned free issue materials and scraps, rebate items, cost of the items lost, etc. would be deducted from the Respondent. Upon calculation, the Appellant determined that the Respondent was liable to pay an amount of Rs. 89,63,093/- to the Respondent. And at this juncture, the dispute arose.

4. The Respondent questioned the proposed deductions terming them as illegal and beyond the terms of the contract. The Respondent issued a notice raising several claims and demanded reference of the matter for arbitration. As the Appellant did not respond to the notice, the Respondent approached the High Court of Orissa in ARBP No. 42 of 2016 u/s 11 of the Act. This Court was pleased to appoint former Judge of Orissa High Court Justice A.K. Parichha as the Sole Arbitrator in the matter.

5. Before the Sole Arbitrator both the parties, tendered oral and documentary evidence. Upon analysis and consideration of the evidence adduced by the parties, the Sole Arbitrator was pleased to pass an award in favour of the present Respondent vide award dated 17.12.2019.

6. Aggrieved, the present Appellant preferred an application u/s 34 of the A&C Act. Vide judgment dated 18.5.2023 in Arbitration Proceeding No.1 of 2020, the Ld. District Judge, Koraput at Jeypore was pleased to dismiss the said application on the ground that the Appellant has failed to point out any illegality in the Award. Hence, the present petition.

7. Now that the facts leading up to the ins