Courts Must Be Very Conservative While Dealing With Arbitral Awards & Confine Themselves To Grounds Strictly Available U/S 34 A&C Act: HP High Court

The Himachal Pradesh High Court emphasised that the Courts must be very conservative while dealing with arbitral awards and confine themselves to the grounds strictly available under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act).

The Court was dealing with Arbitration Appeals preferred by the National Highways Authority of India (NHAI) against the dismissal of its Applications under Section 34 of A&C Act by the District Judge.

A Single Bench of Justice Jyotsna Rewal Dua observed, “In Bombay Slum Redevelopment Corporation Pvt. Ltd. Vs. Samir Barain Bhojwani25, the Hon’ble Apex Court emphasized that supervisory role of Courts is very restricted in dealing with appeals under Section 37 of the Act. Scope of interference in a petition under Section 34 of the Act is very narrow. Jurisdiction under Section 37 of the Act is narrower. By their own volition, the parties choose to go before the Arbitral Tribunal instead of availing remedy before the traditional Civil Courts. Therefore, Courts must be very conservative while dealing with arbitral awards and confine themselves to the grounds strictly available under Section 34 of the Act.”

The Bench reiterated that, mere possibility of an alternative view on facts or interpretation of contract does not entitle Courts to reverse findings of the Arbitral Tribunal.

Advocate Shreya Chauhan represented the Appellant while Advocate Varun Rana represented the Respondents.

In this case, the Appeals arose out of the acquisition of land by the Appellant i.e., NHAI. A Notification under Section 3A(1) of the National Highways Act, 1956 (NH Act) was published in the Official Gazette in 2012 for acquiring the land for four laning of NH-21. Notification under Section 3G(3) of the NH Act inviting claims from interested persons was published in the newspapers on different dates from January to April 2013. For the land covered by the said notifications, the Competent Authority Land Acquisition (CALA) announced an award. In terms of the award, market value of the land was assessed at Rs. 50,00,000/- per bigha.

Seeking enhancement in the market value of the acquired land, the landowners filed their claim Petitions under Section 3G(5) of the NH Act before the notified Arbitrator. The Arbitrator passed the award under Section 3G(5) of the NH Act and the claim Petitions filed by the landowners were allowed. The market value of the acquired land was enhanced to Rs. 68,16,513/- per bigha. Being aggrieved, the NHAI filed Applications before the District Judge but the same were dismissed. Hence, it was before the High Court.

The High Court in the above context of the case, said, “It is by now well-settled that the scope of Appellate Court exercising jurisdiction under Section 37 of the Act to review the findings in an award, is narrow/limited, if the award has been upheld or substantially upheld under Section 34.”

The Court added that the Courts ought not to interfere with arbitral award in a casual and cavalier manner.

“In Reliance Infrastructure Ltd. vs. State of Goa, the Hon’le Apex Court held that ‘patent illegality’ in the award calls for interference but a mere illegality is not patent illegality. It ought to be apparent on the face of the award and not the one which is culled out by way of a long drawn analysis of pleadings and evidence”, it noted.

Furthermore, the Court said that the award passed by the Arbitrator cannot be said to be suffering from any patent illegality, necessitating interference by the Court.

“The learned District Judge has examined the award in accordance with law vis-à-vis the contentions urged by the appellant and did not find any ground in exercise of jurisdiction under Section 34 of the Arbitration Act for interfering with it. Having considered the impugned judgment, the award and the contentions now urged, I do not find it a case to interfere in essence of limited jurisdiction under Section 37 of the Act”, it concluded.

Accordingly, the High Court dismissed the Appeals.

Cause Title- National Highways Authority of India v. Rajesh Kaptyaksh

Appearance:

Appellant: Advocate Shreya Chauhan

Respondents: Advocates Varun Rana and Suneet Verma

Click here to read/download the Judgment