Arbitral awards are not appealed against but assessed for public policy adherence; courts cannot rectify mere errors of fact.

1. This appeal by appellant / Municipal Corporation is directed against the order dated 16/08/2012 passed in Arbitration Case No.07/2012 by the 7th Additional District Judge, Gwalior. The learned Judge has rejected the objections filed under S.34 of the Arbitration and Conciliation Act, 1996 against award dated 09/11/2011 passed by the Sole Arbitrator (Hon'ble Justice R.B. Dixit (retired)).

2. Before adverting to rival contentions, it is expedient to reiterate the law laid down by the Hon'ble Apex Court related to scope of interference by this Court in exercise of powers under S.37 of the Arbitration and Conciliation Act, 1996 . Regard being had to the concept of Public Policy of India embodied in the under various provision viz; 28, 31, 34 etc., the Court while testing an arbitral award on the anvil thereof does not sit as a Court of appeal in common parlence and cannot correct the errors of facts as the arbitrator is the master of quantity and quality of facts. Nevertheless, the Court is expected to ascertain the assessment / evaluation of such facts / material on record by the Arbitrartor on broad principles under the umbrella of Public Policy of India. The Hon'ble Supreme Court in the case of Associates Builders v. Delhi Development Authority , reported in 2015 (3) SCC 49 : (AIR 2015 SC 620) has observed that the duty to adopt judicial approach arises from the very nature of the power exercised by the Court or the authority under the Statue as the Court or authority or tribunal cannot act in an arbitrary capricious or whimsical manner. Judicial approach ensures that the authority acts bona fide and deals with the subject in a fair, reasonable and objective manner and its decision is not polluted by any extraneous consideration. "Wednesbury Principle of Reasonablness", a well recognised principle in administrative laws, is also a dimension of Public Policy of India. A decision suffering from perversity or any irrationality cannot be construed as reasonable if tested on the touchstone of Wednesbury Principle. Therefore, decision that falls short of standard of reasonableness becomes vulnerable and open to challenge in the Court of law. Indeed, if an award is against justice or morality, it also becomes vulnerable being affront to the Public Policy of India besides, patently illegal if the award is passed in contravention of substantive laws of India. Indeed, if the award was induced or affected by fraud or corrpution, it stands vitiated being contrary to the Public Policy of India as explicit from explanation appended to S.34 (2)(b)(ii) of the Act, 1996. That apart, the Arbitral tribunal is under legal obligation to decide the dispute in accordance with the terms of the contract and shall take into account the usages of the trade applicable to the transcation, ignorance or deviation from the terms of the contract shall render the award polluted with patent illegality in the teeth of S.6 of the Act, 1996. Conclusions drawn on the basis of available evidence are not open for correction unless, the same are polluted with arbitariness and capriciousness. Similarly, in the case of Shah, Shares and Stock Broker (P) Ltd. v. M/s. B.H.H. Securities (P) Ltd. and Others reported in AIR 2012 SC 1866 the Hon'ble Supreme Court has observed that under S.34 of the Act, the Court does not sit in an appeal over an award of an Arbitral tribunal to take recourse to reassessment and reappreciation of the evidence. An award can be challenged only under the grounds mentioned in S.34(2) of the Act. The same law has been reiterated in the case of Haryana Tourism Limited v. Kandhari Beverages Limited , reported in 2022 (3) SCC 237 : (AIROnLine 2022 SC 22) hold