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Issues: Whether the High Court was justified in setting aside a reasoned arbitral award by re-appreciating the evidence and interfering with the award under Section 34 of the Arbitration and Conciliation Act, 1996.
Analysis: The award was based on appreciation of evidence and on the contractual interdependence between the parties' obligations. The arbitrator found that the respondent had failed to perform reciprocal obligations necessary for execution of the work and that the termination was illegal. The court below had correctly declined to re-weigh the evidence, since interference under Section 34 is limited and does not permit the court to act as an appellate forum over the arbitral tribunal. The High Court, however, reassessed the evidence and substituted its own view on the contractual terms and factual matrix, which was impermissible where the arbitrator had taken a plausible and reasoned view. An award can be disturbed on public policy grounds only in exceptional cases where it shocks the conscience, and not merely because another view is possible.
Conclusion: The High Court's interference with the arbitral award was unjustified and unsustainable; the award was restored and its enforcement upheld in favour of the appellant.
Ratio Decidendi: A reasoned arbitral award cannot be set aside under Section 34 merely by re-appreciating evidence or substituting a different factual view where the arbitrator's conclusion is plausible and within the limited scope of judicial interference.
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