Arbitral Tribunal Is Sole Judge Of Evidence, Court Not Required To Re-Evaluate Evidence U/S 34 Of Arbitration Act: Delhi High Court
The Delhi High Court bench of Justice Vibhu Bakhru and Justice Tejas Karia held that the arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral award. An award would not be held invalid merely because the award is based on little evidence or on evidence which does not meet the quality of a trained legal mind. Also,...
The Delhi High Court bench of Justice Vibhu Bakhru and Justice Tejas Karia held that the arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral award. An award would not be held invalid merely because the award is based on little evidence or on evidence which does not meet the quality of a trained legal mind.
Also, the Court held that it is not required to reappreciate or reevaluate the evidence and reagitate the disputes under Section 34 of the Arbitration & Conciliation Act, 1996.
Brief Facts of the case:
The dispute arose with respect to a Transport Agreement wherein the respondent is engaged in the business of providing services of a 'Cab Operator' to public in general and the appellant is a media company interested in availing the respondent's services. The respondent contended that an outstanding payment of Rs.46,95,759 was due, but the appellant failed and neglected to pay the outstanding due. Then, the respondent invoked arbitration to adjudicate the dispute and filed a petition under Section 11 of the Arbitration & Conciliation Act, 1996 for appointment of the arbitrator.
Then, the Arbitral Tribunal was formed, and it passed an award in favour of the respondent. Aggrieved by this, the appellant challenged the award under Section 34 of the Act, contending that the Arbitral Tribunal had erred in ignoring the principles of the Indian Evidence Act, 1872. The appellant claimed that the Arbitral Tribunal had accepted photocopies of the documents including the invoices, which were disputed and reliance on such secondary evidence is impermissible. However, the Commercial Court didn't accept the contentions of the appellant and rejected the appellant's prayer to set aside the impugned award. Thus, the appellant filed an appeal under Section 37 of the Act challenging the order passed by the Commercial Court.
Observation of the Court:
The court held that it is apparent from the reading of the impugned award that the Arbitral Tribunal drew its conclusion after evaluating the evidence and material produced by the parties.
Also, the court noted that the provisions of Indian Evidence Act, 1872 are not applicable to the arbitral proceedings. Section 1 of the Indian Evidence Act, 1872 as well as the Section 19 of Act expressly stipulate that the Indian Evidence Act, 1872 is not applicable to arbitral proceedings. However, its trite that the fundamental principles of the said enactment would serve as a guide for the Arbitral Tribunal to evaluate the material and draw its conclusions. The court held that Arbitral Tribunal is the sole judge of the quality and quantity of the evidence.
Further, the court affirmed that it is not required to reappreciate or reevaluate the evidence and reagitate the disputes. The scope of examination under Section 34 of the Act is confined to determining whether the arbitral award is required to be set aside on the grounds as set out under Section 34(2) and 34(2)(a) of the Act.
Consequently, the appeal was dismissed.
Case Title: DIRECT NEWS PVT. LTD versus DTS TRAVELS PVT. LTD
Case Number: FAO (COMM) 53/2025 & CM APPL. 12360-61/2025
Counsel for the Petitioner: Ms Ekta Choudhary, Mr Anand Krishna and Mr Ayush Kumar, Advocates.
Counsel for the Respondent: Mr Deepak Dhingra and Ms Sneh Somani, Advocates.
Date of Judgment: 03.03.2025
