Merely showing existence of another reasonable interpretation not sufficient to allow for interference; Punjab and Haryana HC refuses to interfere with arbitration award

Punjab and Haryana High Court

Punjab and Haryana High Court: While dismissing the appeal preferred by the appellant challenging the order dated 12-12-2018 passed by the Additional District Judge, Chandigarh and for setting aside Sole Arbitrator’s award dated 14-06-2016 , Lisa Gill, J., held that the appellant has failed to make out a case for setting aside the Award.

Facts:

The respondent participated in the tender process for construction, quoting the lowest rates, which were accepted by the appellant. The respondent expressed their inability to initiate and undertake the allotted work. Fresh tenders were called because of this, and the work was given to another at a rate higher than on which the respondent was supposed to work. Due to all this, the appellant suffered a loss as he paid an extra amount. Hence, the appellant invoked the Arbitration clause and a Sole Arbitrator was appointed.

The Arbitrator rejected the claim of the appellant. It was observed that arbitration proceedings were maintainable according to the tender. It was observed that the appellant was charge-sheeted for wrongly changing the scope of work without invoking the clause of risk and cost of the respondent. Only the forfeiture of the earnest money was found to be valid and justified.

The petitions preferred by the appellant in the Court of Additional District Judge (‘ADJ’) were dismissed finding no merits. Hence, this appeal was preferred by the appellant under Section 34 of Act 1996. The ADJ declined to interfere in the matter as an Award under Section 34 of the Arbitration and Conciliation Act, 1996 (‘Act’) can be set aside only on the basis of specific grounds contained therein. The appellant was unable to make out a case for setting aside the Award dated 14-06-2016.

Arguments:

The counsel for the appellant submitted that the appellant’s claim for recovery was incorrectly rejected by the Arbitrator. Although the counsel was unable to deny that the scope of work was changed by the appellant without invoking the clause of risk and cost of the respondent. The impugned award was passed after the inquiry against the appellant was completed.

Analysis and Observation:

The Court relied upon a judgment of theSupreme Court in NTPC Ltd. v. Deconar Services Pvt. Ltd., 2021 SCC OnLine SC 498 wherein it was held that to merely show the existence of another reasonable interpretation or view on the basis of material on the record is not sufficient to allow for interference even if a separate view is possible which in any case is not the scenario in the instant case.

In the view of the above, the Court opined that the ADJ correctly declined to interfere in the matter.

The Court observed that “Clearly, the appellant has failed to make out a case for setting aside the Award dated 14.06.2016.”

“This Court is not to sit as a Court of Appeal and in case plausible and reasonable view has been taken by the Arbitrator on the basis of the evidence on record, the same is not to be interfered, even if a separate view is possible which in any case is not the scenario in the instant case.”

[Punjab State Cooperative Supply and Marketing Federation Limited v. B.D.S. Décor & Prefab (P) Ltd., 2022 SCC OnLine P&H 1857, decided on 14-07-2022]


Advocates who appeared in this case :

Mr. Hardik Ahluwalia, Advocate, for the Appellant.

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