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2026 Supreme(Del) 583

IN THE HIGH COURT OF DELHI AT NEW DELHI
AVNEESH JHINGAN, J.

Pandrol Rahee Technologies Pvt Ltd., Through Authorized Representative Varun Bhojak – Petitioner
Versus
IRCON International Ltd, Through Its Chairman Mr. Sunil Kumar Chaudhury – Respondent
O.M.P. (COMM) 414 of 2023
Decided On : 20-05-2026

Advocates Appeared:
For the Petitioner: Mr. Naveen R. Nath, Sr. Adv with Mr. Nishant Das, Mr. Atul Kumar, Ms. Disha Gupta, Ms. Aatrayi Das, Ms. Sakshi Nand, Ms. Jyoti Jha and Mr. Aditya Rana, Advs.
For the Respondent: Mr. Suman K. Doval, Mr. Ramesh Wangnoo & Mr. Lakshay Chaudhary, Advs.

Judicial interference with an arbitral award is strictly constrained; courts cannot re-appreciate evidence or substitute the arbitrator’s plausible interpretation of contract terms with their own, unless the award is perverse, fundamentally illegal, or conflicts with the public policy of law.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 34 - Scope of judicial interference - An arbitral award cannot be set aside merely because the court prefers a different interpretation of the contract, provided the view taken by the arbitrator is plausible and not perverse. Judicial review is limited and does not extend to sitting in appeal over the merits of the decision or re-appreciating evidence. (Paras 17.1, 17.3)

(B) Contractual Interpretation - Variation of quantity - Interpretation of tender documents, technical specifications, and the priority of contract clauses falls within the exclusive domain of the arbitrator. Findings that a contract for a set of items constitutes a fixed-price agreement despite increases in quantity are matters of construction deemed to be within the arbitrator's jurisdiction. (Paras 10, 15, 16)

(C) Scope of Appellate Jurisdiction - The court must limit its intervention to the grounds specified in the statute, specifically where the award is found to be patently illegal, contrary to public policy, or violates fundamental notions of justice. (Paras 17.2, 17.5)

Facts of the case:
A petition was filed challenging an arbitral award regarding a dispute over claims for additional payments arising from a variation in the quantity of sets to be supplied under a contract. The petitioner contended that the variation necessitated the supply of different components, leading to increased production costs. The arbitrator rejected these claims, interpreting the contract clauses and technical stipulations to mean that the price for the sets was fixed and that no additional payments were permissible.

Findings of Court:
The court found that the arbitrator's interpretation of the tender documents was plausible and based on evidence. It concluded that the petitioner had violated technical stipulations by commencing supplies without requisite approvals and that the contract did not support the claim for additional remuneration beyond the agreed price. The arbitrator’s findings on the interpretation of contract clauses were deemed legally permissible.

Issues: Whether the arbitral award was based on a perverse interpretation of the contract and whether the court should interfere with the findings on the basis of a re-evaluation of evidence or contractual terms.

Ratio Decidendi: An arbitral tribunal is the final authority on the quality and quantity of evidence. Its interpretation of contractual terms is binding if it arrived at a reasonable and plausible view. Judicial interference is restricted and cannot be exercised to substitute the court's opinion for that of the arbitrator unless the award is shown to be perverse or contrary to fundamental policy.

Result: Petition dismissed and the award upheld.

Table of Content
1. factual background of the arbitration dispute over tender quantities and payments. (Para 1 , 2)
2. conflicting contentions regarding contract interpretation and scope of section 34 interference. (Para 3 , 4)
3. determination that the contract was for a fixed-price supply and variation clauses did not trigger additional payments. (Para 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 18)
4. limited scope of judicial review under section 34 of the arbitration and conciliation act. (Para 17)
5. final outcome dismissing the section 34 petition and upholding the arbitral award. (Para 19)

JUDGMENT :

AVNEESH JHINGAN, J.

1. The present petition is filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short 'the Act') against the arbitral award dated 15.05.2023 (for brevity 'the award').

2. The facts shorn of unnecessary detail are that the respondent on 21.04.2015, issued Notice Inviting Tender (for short 'NIT') for design, manufacture, supply, transportation and delivery of Ballastless Track Fastening for standard gauge railway track (1435 mm) with 60 kg 1080 grade rail for installation of ballastless track in elevated and underground sections of Mukundpur–Lajpat Nagar (excluding Line-7) of Delhi MRTS Project Phase-III.

2.1 The petitioner was the successful bidder and the Letter of Acceptance (LOA) dated 21.05.2015 was issued. On 09.10.2015, the parties executed Contract CT-1A (for brevity 'the contract'). The respondent by communication dated 04.08.2016 (hereinafter referred to as 'variation order') varied the quantity of the ballastless track fastening sets (for short 'sets') to be supplied under each of the categories and the total quantity increased from 1,86,500 sets to 1,98,715 sets. The details of the change in quantities of sets pursuant to the variation order are tabulated below:

Item No	Description of Item	Unit	BOQ Qty.	Variation Qty.	Total Qty. after variation	Percentage Change %
1	Supply of BLT fittings
1.1	Supply track & curve track up to 1750m	Sets	1,60,000	(-) 56,751	1,03,249	(-) 35.46%
1.2	For curved track
a	Radius 1750-1000m	Sets	1,500	(+) 13,522	15,022	(+) 901.46%
b	Radius 1000m 500m	Sets	4,500	(+) 20,558	25,058	(+) 456.84%
c	Radius 500-300m	Sets	19,000	(+) 28,804	47,804	(+) 151.60%
d	Radius <300m	Sets	1500	(+) 6,082	7,582	(+) 405.46%
	Total		1,86,500		1,98,715

2.2 The dispute arose as according to the petitioner, the revised quantities required supply of a 4-bolt fastening system in place of the 2-bolt fastening system for curved tracks above 500 metres. The petitioner had to procure and supply additional components including anchor, nut bolts, eccentric bush, collared washer and compression springs for varied order and thereby the cost of execution increased.

2.3 The petitioner completed the supplies and completion certificate dated 11.05.2017 was issued. The payment for the sets supplied was released by the respondent. The claim of the petitioner for payment over and above agreed price towards the additional components supplied was denied by the respondent.

2.4 The petitioner on 23.08.2019, invoked arbitration by issuing notice under Section 21 of the Act. Vide court order dated 25.10.2021, the sole arbitrator was appointed and the proceedings culminated in the impugned award dated 15.05.2023. The claims of the petitioner were rejected and hence, the present petition.

3. Learned senior counsel for the petitioner submits that the sets were accepted by the respondent and the contract was fully executed. The petitioner had to supply 4-bolt system instead of the 2-bolt system for the curved tracks above 500 metres. The contention is that the arbitrator failed to appreciate that the cost of supplies increased due to the variation order.

3.1 Reliance is on the decisions of the Supreme Court in Patel Engineering Ltd. v. North Eastern Electric Power Corporation Ltd. , (2020) 7 SCC 167, Associate Builders v. Delhi Development Authority , (2015) 3 SCC 49, Dyna Technologies Pvt. Ltd. v. Crompton Greaves Ltd. , (2019) 20 SCC 1 and Ssangyong E

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2026 Supreme(Del) 583

IN THE HIGH COURT OF DELHI AT NEW DELHIAVNEESH JHINGAN, J. Pandrol Rahee Technologies Pvt Ltd., Through Authorized Representative Varun Bhojak – PetitionerVersusIRCON International Ltd, Through Its Chairman Mr. Sunil Kumar Chaudhury – Respondent O.M.P. (COMM) 414 of 2023Decided On : 20-05-2026

Judicial interference with an arbitral award is strictly constrained; courts cannot re-appreciate evidence or substitute the arbitrator’s plausible interpretation of contract terms with their own, unless the award is perverse, fundamentally illegal, or conflicts with the public policy of law.

Cases Referred (9)