It Is Impermissible To Interfere With Arbitrator’s View Merely Because Another View Is Possible: Delhi District Court

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Excerpt

In a judgment on April 15, 2021, the District Court of Delhi observed that merely because the court has another view is not permissible to interfere with the Arbitrator’s view and held that ground for interference has not been made out.

Facts

When a tender for the work of “repair to existing Barat Ghar” was invited in this case, the Petitioner/tender claimant’s was approved. According to the tender document’s provision, the Petitioner was required to visit the worksite to identify any problems that might have arisen during the execution of the work and also to finalize the rate of the offer. The Petitioner’s tender had to be completed within three months of the work being awarded, and time was of the essence.

Upon non-completion of work within the original time of completion, the period was extended upon specific request of the Petitioner, but, the work was not completed. The Petitioner was supposed to start work within 15 days from the date of award of work, i.e., 20/10/2006 but the work was started on 8/1/2007. Later, the first RA bill was paid which was taken without any protest and then the Petitioner abandoned the site which resulted in the breach of contract and he failed to discharge contractual obligations. Also, as per the respondent, the Petitioner did not deploy sufficient men and machinery at the site and due to that reason they work was badly delayed.

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Later on 4/9/2007, the arbitration clause was invoked by the Petitioner and thereafter approached the High Court of Delhi by way of Arbitration petition which was decided in the year 2009 and the matter was referred to DIAC and Learned Sole Arbitrator. The Arbitral proceeding culminated into an impugned arbitral award. That award was partly challenged to the extent of claims 2, 3, 4, 5, 6, and 7. 

Pleadings before the Court

It was submitted by the learned counsel on behalf of the Petitioner that all required arrangements, such as men, material, and machinery, were made following the specifications so that the awarded work could be completed within the specified time frame, but despite all efforts, no sketches or plans were ever presented to the claimant/Petitioner, and no site was handed over to the claimant to complete the work and it was only in 2007, the site was given after several persuasion. It was further submitted that the tender was for the repair of an existing Barat Ghar, but there was no such thing as an existing Barat Ghar to repair, so it was a fresh and new construction of Barat Ghar, and fraud was perpetrated against them that went beyond the principles of contract. Furthermore, it was argued that the Arbitral Tribunal had committed a legal error by partly approving the claims while ignoring the records and averments in support of them. It was also argued that the contested award was against public policy because the Arbitral Tribunal acted improperly by dismissing the Petitioner’s factual contentions.

On the other hand, it was submitted by the learned counsel on behalf of the Respondent that since this was a summary proceeding, the award could not be contested as a matter of right of appeal before the Court. Also, it was well-established law that the arbitrator was the sole judge of the quality and quantity of the proof and under Section 34 of the Act, the evidence cannot be re-appreciated at this point. It was likely that the court would reach a different opinion based on the same facts as the arbitrator, but that’s no reason to overturn the arbitrator’s decision. It was further submitted that as a result, the Petitioner’s objection petition was liable to be dismissed as unmaintainable because it does not fall within the ambit of Section 34 of the Act and the Petitioner/claimant has made no basis for challenging the award.

Court’s Observation

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It was observed by the District Court of Delhi that the view held by the learned Sole Arbitrator was a reasonable one, and this Court cannot interfere with the arbitrator’s decision simply because of another viewpoint as possible. Furthermore, the decisions of the Leaned Sole Arbitrator concerning claim nos. 2,3,5,6, and 7 were based on an assessment of the facts and evidence after providing the parties with all fair opportunity to lead their evidence. According to the law set out in the precedents quoted above, the Court cannot substitute its assessment of legal or factual conclusions to reach a different conclusion than the Arbitrator.

It was further submitted that on the face of the record, the Ld. Sole Arbitrator had assigned cogent grounds and adequate reasons in drawing the just judgment, and there was no error of law or wrongdoing. This Court cannot re-appraise the testimony, and it was not appropriate for this Court to intervene in the appeal over the Learned Sole Arbitrator’s conclusions/findings of facts concerning claims 2, 3, 5, 6, and 7.

Court’s Judgment

The Court upheld the decision of the Learned Sole Arbitrator and held that there was no error on the face of the record and the award was not against public policy. Also, no grounds attract Section 34 of the Arbitration and Conciliation Act.


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