2026 Supreme(Del) 699

IN THE HIGH COURT OF DELHI AT NEW DELHI
JASMEET SINGH, J.
Atlanta Infra Assets Limited - Petitioner
Versus
National Highway Authority of India - Respondent
O.M.P. (COMM) No. 152 of 2022, O.M.P. (COMM) No. 243 of 2022
Decided On : 26-05-2026

Courts exercise restricted jurisdiction under Section 34, limiting interference to cases of patent illegality. Tribunals hold discretion to interpret contracts and assess damages, and courts shall not sit as an appellate authority to re-appreciate evidence or substitute findings that are otherwise plausible and reasoned.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 34 - Challenge to Arbitral Award - Scope of judicial interference - Limited to specific grounds including patent illegality - Court exercising jurisdiction under Section 34 is not an appellate court - It cannot re-appreciate evidence or re-interpret contract terms where the tribunal's view is plausible and supported by reasoning - Preservation of finality of arbitral awards is a foundational precept. (Paras 48, 85-87)

(B) Contract Law - Interpretation of “reasonable time” - Where a contract omits a fixed timeline for performance, the tribunal acts within jurisdiction by ascertaining a “reasonable time” based on evidentiary record and surrounding circumstances - This interpretative exercise is not akin to rewriting the contract and remains beyond the scope of Section 34 scrutiny. (Paras 58-61)

(C) Interest and Damages - Pendente lite interest - Arbitrator possesses discretionary authority under Section 31(7)(a) to determine interest rates based on prevailing economic conditions and facts - Liquidated damages - Mere existence of a penalty clause in a contract does not entitle an aggrieved party to damages without proof of actual loss - Where evidence of loss is deficient, tribunal may exercise discretion to award nominal or token damages in alignment with equitable principles. (Paras 68-71, 79-83)

Facts of the case:
Cross-petitions were filed by the claimant and the respondent against an arbitral award arising from disputes over a highway infrastructure project. The primary controversies involved allegations regarding delays in land acquisition, entitlement to specific interest rates, and the quantification of damages for failure to execute maintenance and bituminous overlay work.

Findings of Court:
The tribunal’s fixation of a reasonable period for land handover and its interpretation of contractual timelines were deemed plausible. Furthermore, the tribunal’s decision to limit damages to token amounts, based on the non-demonstration of actual losses, was found consistent with established legal principles and not subject to interference.

Issues: The main issues addressed were whether the tribunal acted beyond its jurisdiction in interpreting contractual timelines, whether the interest rate awarded was valid regarding the party's claims, and whether the award of token damages for contractual breaches was legally sustainable.

Ratio Decidendi: Findings of an arbitral tribunal are insulated from judicial review provided they are based on a plausible interpretation of the contract and evidence. Judicial intervention is restricted strictly to cases of perversity or patent illegality; where a tribunal has properly applied the principles of contract law and assessed the damages based on available evidence, the award must be upheld.

Result: Petitions dismissed.