{"id":322060,"date":"2024-05-14T11:00:16","date_gmt":"2024-05-14T05:30:16","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=322060"},"modified":"2024-05-17T17:24:46","modified_gmt":"2024-05-17T11:54:46","slug":"awards-cannot-be-set-aside-on-ground-of-erroneous-application-of-law-or-by-reappreciation-of-evidence-until-it-suffers-from-patent-illegality-allahabad-high-court","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2024\/05\/14\/awards-cannot-be-set-aside-on-ground-of-erroneous-application-of-law-or-by-reappreciation-of-evidence-until-it-suffers-from-patent-illegality-allahabad-high-court\/","title":{"rendered":"Awards cannot be set aside on ground of erroneous application of law or by reappreciation of evidence until it suffers from patent illegality: Allahabad High Court"},"content":{"rendered":"<div style=\"text-align: justify; line-height: 150%;\">\n<p style=\"margin-bottom: 3%;\"><span style=\"font-weight: bold;\">Allahabad High Court:<\/span> In an appeal filed by the State under Section <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0001544942\" target=\"_blank\" rel=\"noopener\">37<\/a> of the <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0002726958\" target=\"_blank\" rel=\"noopener\">Arbitration and Conciliation Act, 1996<\/a> (&#8216;the Act&#8217;) against the order passed by the Commercial Court, whereby, the Commercial Court rejected the application made by the State under Section <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0001544939\" target=\"_blank\" rel=\"noopener\">34<\/a> of the <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0002726958\" target=\"_blank\" rel=\"noopener\">Act<\/a>, seeking to set aside the arbitration award issued by the sole arbitrator , the Division Bench comprising of Arun Bhansali, C.J. and Vikas Budhwar, J., dismissed the appeal on the grounds of lack of merit as State failed to demonstrate any clear legal error or substantiate their allegations. Further, the Bench held that the extent of intervention in appellate proceedings according to Section <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0001544942\" target=\"_blank\" rel=\"noopener\">37<\/a> of the <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0002726958\" target=\"_blank\" rel=\"noopener\">Arbitration and Conciliation Act, 1996<\/a> is confined to the grounds permissible under Section 34 for contesting the award, and the awards are not required to be set aside on the ground of erroneous application of law or by reappreciation of the evidence until and unless it suffers from patent illegality.<\/p>\n<p style=\"font-weight: bold;\">Background:<\/p>\n<p style=\"margin-bottom: 3%;\">The State, represented by the Executive Engineer, Madhya Ganga Canal Construction Division-15, Moradabad, issued a tender on 14-12-2010 to construct the Left Side Officer&#8217;s Camp Office at Tubewell Colony, Moradabad. The claimant, Nath Constructions, was awarded the contract as their bid was the lowest. An agreement was signed between the State and Nath Constructions on 14-03-2011, wherein Nath Constructions was required to provide a security deposit and earnest money.<\/p>\n<p style=\"margin-bottom: 3%;\">The State alleges that Nath Constructions failed to complete the work within the stipulated time frame of 9 months, finishing it only on 15-10-2014 after extensions were granted. Disputes arose between the parties, leading to the appointment of a sole arbitrator as per the agreement terms. Nath Constructions filed a claim petition seeking payment along with interest.<\/p>\n<p style=\"margin-bottom: 3%;\">The sole arbitrator awarded Nath Constructions Rs.17,37,261\/- along with interest, which the State challenged through an application under Section <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0001544939\" target=\"_blank\" rel=\"noopener\">34<\/a> of the <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0002726958\" target=\"_blank\" rel=\"noopener\">Act<\/a>. However, the application was rejected on 20-07-2022 by the Commercial Court in Moradabad.<\/p>\n<p style=\"margin-bottom: 3%;\">Consequently, the State has filed this appeal against the court&#8217;s decision dated 20-07-2022.<\/p>\n<p style=\"font-weight: bold;\">Analysis and Decision:<\/p>\n<p style=\"margin-bottom: 3%;\">The Court saidthat the apple of discord was whether the arbitrator acted unlawfully by awarding a specific amount without adequately considering the objections raised by the State.<\/p>\n<p style=\"margin-bottom: 3%;\">The Court said thatthe objections raised lacked specificity and detail. Furthermore, the grounds presented in the application under Section <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0001544939\" target=\"_blank\" rel=\"noopener\">34<\/a> of the <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0002726958\" target=\"_blank\" rel=\"noopener\">Act<\/a> were general and unsupported by factual basis.<\/p>\n<p style=\"margin-bottom: 3%;\">The Court noted that despite the appellant&#8217;s argument that the award lacked reasoning, the arbitrator addressed 14 issues in detail and provided reasons for the decision.<\/p>\n<p style=\"margin-bottom: 3%;\">Bearing in mind the contours of the appellate proceeding under Section 37, and its limited scope and ambit of challenge under Section <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0001544939\" target=\"_blank\" rel=\"noopener\">34<\/a> of the <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0002726958\" target=\"_blank\" rel=\"noopener\">Act<\/a>, the Court said that the awards are not required to be set aside on the ground of erroneous application of law or by reappreciation of the evidence until and unless it suffers from patent illegality.<\/p>\n<p style=\"margin-bottom: 3%;\">The Court opined while acknowledging the requirement for arbitral awards to contain reasons, that such reasons depend on the pleadings and evidence presented. Given that the Statefailed to substantiate its case adequately, the Court viewedthat the award was reasoned and not vitiated.<\/p>\n<p style=\"margin-bottom: 3%;\">The Court referred tothe principles laid down in <span style=\"font-style: italic;\">Som Datt Builders Ltd<\/span>. v. <span style=\"font-style: italic;\">State of Kerala<\/span>, <a href=\"https:\/\/www.scconline.com\/Members\/NoteView.aspx?enc=KDIwMDkpIDEwIFNDQyAyNTkmJiYmJjQwJiYmJiZTZWFyY2hQYWdl\" target=\"_blank\" rel=\"noopener\">[(2009) 10 SCC 259]<\/a>, <span style=\"font-style: italic;\">Dyna Technologies Pvt. Ltd<\/span>.v.. <span style=\"font-style: italic;\">Crompton Greaves Ltd<\/span>., <a href=\"https:\/\/www.scconline.com\/Members\/NoteView.aspx?enc=KDIwMTkpIDIwIFNDQyAxJiYmJiY0MCYmJiYmU2VhcmNoUGFnZQ==\" target=\"_blank\" rel=\"noopener\">[(2019) 20 SCC 1]<\/a>, and <span style=\"font-style: italic;\">Delhi Airport Metro Express Private Limited<\/span>v.<span style=\"font-style: italic;\">. Delhi Metro Rail Corporation Limited<\/span>, <a href=\"https:\/\/www.scconline.com\/Members\/NoteView.aspx?enc=KDIwMjIpIDEgU0NDIDEzMSYmJiYmNDAmJiYmJlNlYXJjaFBhZ2U=\" target=\"_blank\" rel=\"noopener\">[2022 (1) SCC 131<\/a>], andaffirmed that the awards made by technical experts, such as engineers, are not scrutinized in the same manner as those prepared by legally trained individuals. It noted that the arbitrator, being a Superintending Engineer of the U.P. Irrigation Department, falls under this category of technical experts.<\/p>\n<p style=\"margin-bottom: 3%;\">The Court opinedthat the Statefailed to demonstrate any patent illegality warranting appellate intervention. Mere allegations without substantiation from pleadings and records were deemed insufficient to justify interference. Therefore, the Court dismissed the appeal for lacking merit.<\/p>\n<p style=\"margin-bottom: 3%;\">[<span style=\"font-weight: bold; color: #632423;\">State of U.P. v. Nath Construction., <a href=\"http:\/\/www.scconline.com\/DocumentLink\/a7fvYWA6\" target=\"_blank\" rel=\"noopener\">2024 SCC OnLine All 1525<\/a>, Order dated 06-05-2024<\/span>]<\/p>\n<hr\/>\n<p>Advocates who appeared in this case :<\/p>\n<p style=\"margin-left: 18pt;\"><span style=\"font-weight: bold;\">Counsel of Petitioner:<\/span> Advocate Siddharth Singh Shrinet<\/p>\n<p style=\"margin-left: 18pt;\"><span style=\"font-weight: bold;\">Counsel of Respondents:<\/span> Advocate Jagat Narayan Mishra<\/p>\n<h3 style=\"color: #000080;\">Buy Arbitration and Conciliation Act, 1996 &nbsp; <a href=\"https:\/\/www.ebcwebstore.com\/product_info.php?products_id=382\" target=\"_blank\" rel=\"noopener\">HERE<\/a><\/h3>\n<p style=\"margin-bottom: 3%;\"><a href=\"https:\/\/www.ebcwebstore.com\/product_info.php?products_id=382\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/06\/arbitration-and-conciliation-act-1996-191x300.png\" alt=\"arbitration and conciliation act, 1996\" width=\"191\" height=\"300\" class=\"aligncenter size-large wp-image-294803\" srcset=\"https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/06\/arbitration-and-conciliation-act-1996-191x300.png 191w, https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/06\/arbitration-and-conciliation-act-1996-38x60.png 38w, https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/06\/arbitration-and-conciliation-act-1996.png 620w\" sizes=\"auto, (max-width: 191px) 100vw, 191px\" \/><\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p style=\"font-style: italic;\">&#8220;The Statehas miserably failed to show any patent illegality warranting interference in appellate jurisdiction. Mere allegation would not suffice until and unless it stands substantiated from the pleading and the records.&#8221;<\/p>\n","protected":false},"author":67011,"featured_media":314936,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[8991,3226,35210,68644,31135,68645],"class_list":["post-322060","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-appeal","tag-arbitration","tag-patent-illegality","tag-section37-of-arbitration-and-conciliation-act","tag-sole-arbitrator","tag-u-p-irrigation-department"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Awards cannot be set aside on ground of erroneous application of law or by reappreciation of 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