{"id":332294,"date":"2024-10-02T16:00:14","date_gmt":"2024-10-02T10:30:14","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=332294"},"modified":"2024-10-04T09:35:40","modified_gmt":"2024-10-04T04:05:40","slug":"scope-powers-appellate-court-s37-acact-arbitral-award-sc-legal-news","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2024\/10\/02\/scope-powers-appellate-court-s37-acact-arbitral-award-sc-legal-news\/","title":{"rendered":"Arbitration and Conciliation Act | Appellate power of Section 37 is limited within the domain of Section 34: Supreme Court"},"content":{"rendered":"
\n

Supreme Court:<\/span> While considering the instant appeal challenging the decision of Punjab and Haryana High Court whereby which it had set aside an Arbitral Award granted in favour of the appellant; the Division Bench of P.S. Narasimha and Pankaj Mithal*<\/span>, JJ., held that the scope of the intervention of the Court in arbitral matters is virtually prohibited, if not absolutely barred and that the interference is confined only to the extent envisaged under Section 34<\/a> of the Arbitration and Conciliation Act, 1996<\/a> (A&C Act). The appellate power of Section 37<\/a> of the A&C Act<\/a> is limited within the domain of Section 34<\/a> of the A&C Act<\/a>.<\/p>\n

The Court further elaborated that Appellate Court’s power is more akin to that superintendence as is vested in civil courts while exercising revisionary powers. The arbitral award is not liable to be interfered unless a case for interference as set out in the earlier part of the decision, is made out. “It cannot be disturbed only for the reason that instead of the view taken by the arbitral tribunal, the other view which is also a possible view, is a better view according to the Appellate Court”<\/span>.<\/p>\n

Background:<\/h3>\n

The appellant entered into an agreement with the respondent for supply of paddy. There arose a dispute between the parties with regard to the recovery of the balance amount. The dispute was referred to the Arbitrator who made an Award in favour of the appellant.<\/p>\n

The respondent challenged the Award before Additional District Judge, wherein the Judge held that the Award suffered no illegality. The respondent then appealed before the High Court, wherein by the impugned order, the High Court not only set aside the judgment of the Additional District Judge, it also set aside the Arbitral Award.<\/p>\n

Issue:<\/h3>\n

The Court had to consider scope of powers of the Appellate Court under Section 37<\/a> of A&C Act<\/a> and whether the Appellate Court was justified in setting aside the Award which had already been confirmed under Section 34.<\/p>\n

Court’s Assessment:<\/h3>\n

The Court noted that the object of A&C Act<\/a> is to provide for a speedy and inexpensive alternative mode of settlement of dispute with the minimum of intervention of the courts. it was pointed out that judicial interference, if any, is provided inter-alia only by means of Sections 34 and 37 respectively.<\/p>\n

The Court stated that one of the one of the main grounds for interference or setting aside an award is where the arbitral award is in conflict with the public policy of India i.e. if the award is induced or affected by fraud or corruption or is in contravention with the fundamental policy of Indian law or it is in conflict with most basic notions of morality and justice.<\/p>\n

It was further noted that an arbitral award is not liable to be interfered with only on the ground that the award is illegal or is erroneous in law that too upon reappraisal of the evidence adduced before the arbitral trial. Even an award which may not be reasonable or is non-speaking to some extent cannot ordinarily be interfered with by the courts. “If two views are possible there is no scope for the court to reappraise the evidence and to take the different view other than that has been taken by the arbitrator. The view taken by the arbitrator is normally acceptable and ought to be allowed to prevail<\/span>”.<\/p>\n

A plain reading of Section 34 reveals that the scope of interference by the court with the arbitral award under Section 34 is very limited<\/span>, and the court is not supposed to travel beyond the aforesaid scope to find out if the award is good or bad<\/span>.<\/p>\n

Taking note of Section 37, the Court pointed out that the scope of appeal is naturally akin to and limited to the grounds enumerated under Section 34. The appellate power under Section 37 is not akin to the normal appellate jurisdiction vested in the civil courts because the scope of interference of the courts with arbitral proceedings or award is very limited, confined to the ambit of Section 34 and even that power cannot be exercised in a casual and cavalier manner.<\/p>\n

Therefore, with the afore-stated assessment, the Court concluded that the Appellate Court has no authority of law to consider the matter in dispute before the arbitral tribunal on merits so as to find out as to whether the decision of the arbitral tribunal is right or wrong upon reappraisal of evidence as if it is sitting in an ordinary court of appeal.<\/p>\n

It is only when the court exercising power under Section 34 has failed to exercise its jurisdiction vested in it by Section 34 or has travelled beyond its jurisdiction, that the Appellate Court can step in and set aside the order passed under Section 34.<\/p>\n

The Court further pointed out that proceedings under Section 34 are summary in nature and are not like a full-fledged regular civil suit. Therefore, the scope of Section 37 is much more summary in nature and not like an ordinary civil appeal. The award as such cannot be touched unless it is contrary to the substantive provision of law; any provision of the Act or the terms of the agreement.<\/p>\n

Applying the afore-stated position to the instant case, the Court found the arbitral ward reasonable based on evidence and not against public policy of India or the fundamental policy of Indian law or in conflict with the most basic notions of morality and justice. The award was also not found to be against any substantive provision of law or the Act. Therefore, the award was rightly upheld by the Additional District Judge.<\/p>\n

The Appellate Court, as such, could not have set aside the award without recording any finding that the award suffers from any illegality as contained in Section 34 or that the Additional District Judge had committed error in upholding the same. “Merely for the reason that the view of the Appellate Court is a better view than the one taken by the arbitral tribunal, is no ground to set aside the award<\/span>”.<\/p>\n

Hence, the impugned decision of the High Court was set aside as it had committed manifest error of law.<\/p>\n

<\/p>\n

\n

CASE DETAILS<\/p>\n\n\n\n\n<\/colgroup>\n\n\n
\n

Citation:<\/span>
2024 SCC OnLine SC 2632<\/a><\/span><\/p>\n

Appellants :<\/span>
Punjab State Civil Supplies Corporation Ltd.<\/p>\n

Respondents :<\/span>
Sanman Rice Mills<\/p>\n<\/td>\n

\n

Advocates who appeared in this case<\/p>\n

For Petitioner(s):<\/span>
Devendra Singh<\/p>\n

For Respondent(s):<\/span>
Abhimanyu Tewari<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

CORAM :<\/span><\/p>\n

\n
\n

\"P.S.
P.S. Narasimha, J.<\/span><\/a><\/p>\n<\/div>\n

\n

\"Pankaj
Pankaj Mithal, J.<\/span><\/a><\/p>\n<\/div>\n

\n<\/div>\n
<\/div>\n
<\/div>\n
<\/div>\n<\/div>\n<\/div>\n

Buy Arbitration and Conciliation Act, 1996   HERE<\/a><\/h3>\n

\"arbitration<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

“Merely for the reason that the view of the Appellate Court is a better view than the one taken by the arbitral tribunal, is no ground to set aside the award”.<\/p>\n","protected":false},"author":3,"featured_media":332296,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,9],"tags":[20521,2633,3226,17711,73678,44684,5363],"class_list":["post-332294","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-supremecourt","tag-appellate-court","tag-arbitral_award","tag-arbitration","tag-arbitrator","tag-interference-by-court","tag-justice-pankaj-mithal","tag-supreme-court"],"yoast_head":"\nSC decision on scope of powers of the Appellate Court under Section 37 of A&C Act, 1996<\/title>\n<meta name=\"description\" content=\"Arbitration and Conciliation Act| Scope and Power of Appellate Court under 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