Section 34 interference limited where arbitral findings rest on plausible contract interpretation and insufficient proof of claims.

An arbitral award under Section 34 was not interfered with where the tribunal's contractual interpretation was plausible and the challenged claims were unsupported by reliable evidence. The Delhi High Court noted that the differential sales tax claim failed because the claimant did not prove the tax challans related exclusively to the respondent's supplies and the contract price was inclusive of taxes; no Form C obligation arose because the respondent was not shown to be a dealer or registered dealer under the Central Sales Tax Act. Claims for smart-card dues, unutilized cards, referral authentication kits, and post-expiry services were also rejected for lack of proof or contractual basis.

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Issues: (i) Whether the arbitral award rejecting the claim for differential sales tax on account of non-issuance of Form C and the claim for outstanding dues towards smart cards suffered from patent illegality. (ii) Whether the rejection of the claims for unutilized smart cards, non-procurement of referral authentication kits, and reimbursement for services rendered after expiry of the contract warranted interference under Section 34.

Issue (i): Whether the arbitral award rejecting the claim for differential sales tax on account of non-issuance of Form C and the claim for outstanding dues towards smart cards suffered from patent illegality.

Analysis: The claim for differential tax was rejected because the petitioner failed to prove the tax challans exclusively related to the supplies made to the respondent, and the contractual price was found to be inclusive of taxes. The respondent was also held not to be a dealer or registered dealer under the Central Sales Tax Act, 1956, so no obligation arose to issue Form C. As to the outstanding smart-card dues, the Tribunal found that the invoices and documents did not establish the claimed amounts, some dues had already been paid, and the remaining claim was not substantiated by reliable evidence.

Conclusion: The rejection of the tax claim and most of the smart-card dues claim was upheld. Only the amount of Rs. 2,025 was sustained as payable, and no ground for interference was made out in the petitioner's favour.

Issue (ii): Whether the rejection of the claims for unutilized smart cards, non-procurement of referral authentication kits, and reimbursement for services rendered after expiry of the contract warranted interference under Section 34.

Analysis: The claim for unutilized cards failed because no documentary evidence showed that orders were placed after November 2014 or that the respondent caused the alleged inventory loss. The claim for referral authentication kits failed because the agreement only required the respondent to facilitate procurement, not to compel hospitals to purchase. The post-expiry services claim failed for want of proof of any extension of the contract or evidence of expenditure incurred for such alleged services. The findings were treated as plausible contractual interpretations based on the evidence.

Conclusion: No patent illegality or perversity was shown in the rejection of these claims, and interference under Section 34 was declined.

Final Conclusion: The award was sustained in substance, with only the limited amount already allowed in arbitration remaining undisturbed, and the challenge to the award failed.

Ratio Decidendi: An award under Section 34 will not be interfered with where the arbitral tribunal's contractual interpretation is plausible and the challenged claims are unsupported by reliable proof, absent patent illegality or perversity.

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