Extent Of Interference On Arbitral Award By A Court On Factual Score Is Substantially Curtailed By Section 34 Of Arbitration & Conciliation Act: Calcutta HC [Read Judgment]

The Calcutta High Court has observed the arbitrator is seen as the final authority on the appraisal of facts and unless such appraisal is found to be perverse or manifestly unreasonable, the Award should remain undisturbed. The court said that the extent of interference by a court on the factual score is substantially curtailed under section 34 of the Arbitration and Conciliation Act.

Justice Moushumi Bhattacharya observed thus while dismissing an application filed by a party under Section 34 of the Arbitration and Conciliation Act.

In this case, the petitioner had challenged an Arbitral Award on the ground of being perverse and ignoring material evidence and being in conflict with the public policy of India.An Arbitral Tribunal upheld an award passed by a Sole Arbitrator declining relief of Rs.17,13,426/- to the petitioner (claimant in both the arbitration proceedings) on account of dues payable to the petitioner towards transactions in the stock market by the agent of the trading company.

Perusing the award, the Court observed that the conclusion drawn from the documentary evidence was findings by the Arbitrator are not such that no reasonable man could have arrived at such conclusion in the given circumstances or that the findings were vitiated on account of ignorance of vital evidence. The views of the Tribunal are credible and reasonable and are based on the factual contentions put forth by the parties, the Court said.

"In an application under section 34 of the 1996 Act, the Court has to see whether the Award impugned should be set aside on any of the grounds available under section 34, namely the procedural matters in 34 (2)(a) or on the substance of the award under 34(2)(b) which includes an award being in conflict with the public policy of India which is clarified in sub-clauses (i) to (iii) to Explanation 1 (contrary to section 75 or 81; in contravention with the fundamental policy of Indian law; in conflict with the most basic notions of morality or justice) or if an award is vitiated by patent illegality apparent on the face of the award under 34 (2-A). The fetter on a court against re-appreciation of evidence or a review on the merits is stated in Explanation 2 to Section 34(2)(b) and the proviso to 34 (2-A). Recent decisions of the Supreme Court and the High Courts have stressed not only on the curbs imposed on courts against engaging with the facts and evidence but also against substituting a plausible view taken by the arbitrator on those facts by that of a court sitting in a section 34 jurisdiction. The arbitrator is seen as the final authority on the appraisal of facts and unless such appraisal is found to be perverse or manifestly unreasonable, the Award should remain undisturbed."

Dismissing the application, the Court observed that the Award is neither in conflict with public policy of India nor lacking in 'judicial approach'. 

Case name: Sikha Basu Vs. BMA Wealth Creators Limited
Case no.: A.P. 641 of 2016
Coram: JUSTICE MOUSHUMI BHATTACHARYA
Counsel: Advocates Rupak Ghosh and Sourav Kumar Mukherjee

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