Limited interference in arbitration review bars courts from replacing a plausible contractual interpretation with their own view.

Under Sections 34 and 37 of the Arbitration and Conciliation Act, a court cannot reappreciate the contract or substitute an alternative interpretation for a plausible view taken by the arbitral tribunal. Interference is confined to narrow grounds such as perversity or patent illegality. Applying that standard, the tribunal's construction of the contract to reject separate reimbursement for increased entry tax and toll tax was held to be a reasonable reading of the tax and price-variation clauses, and the Single Judge was right not to interfere.

---

---

Issues: (i) Whether interference under Section 37 with a decision upholding an arbitral award can extend to reappreciation of the contract and substitution of an alternative interpretation; (ii) Whether the claims for reimbursement of increased entry tax and toll tax were rightly rejected by the arbitral tribunal and the Single Judge on a plausible reading of the contract.

Issue (i): Whether interference under Section 37 with a decision upholding an arbitral award can extend to reappreciation of the contract and substitution of an alternative interpretation.

Analysis: The scope of judicial interference under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996 is limited and is not akin to a normal appellate jurisdiction. A court exercising jurisdiction under Section 37 is required to examine whether the Section 34 court exceeded its limits, and it cannot re-write the contract or displace a plausible view taken by the arbitral tribunal merely because another interpretation is possible. Interference is justified only where the award is perverse or patently illegal in the sense recognised in arbitral jurisprudence.

Conclusion: The Division Bench was not justified in reinterpreting the contract and interfering with the concurrent findings on the ground of perversity.

Issue (ii): Whether the claims for reimbursement of increased entry tax and toll tax were rightly rejected by the arbitral tribunal and the Single Judge on a plausible reading of the contract.

Analysis: The arbitral tribunal construed Clause 5.1.2 as dealing with taxes directly chargeable on bills raised by the contractor, while Clauses 7.1.1 and 7.1.2 governed general price variation and excluded individual claims arising from fluctuations in taxes or levies on items forming part of the bill of quantities. Reading Clause 11.7 with these provisions, the tribunal held that indirect taxes embedded in quoted rates were not separately reimbursable. The Single Judge found that this was a reasonable and possible view of the contractual scheme and declined to interfere under Section 34.

Conclusion: The rejection of the claims for reimbursement of increased entry tax and toll tax was a plausible contractual interpretation and did not warrant interference.

Final Conclusion: The appeal succeeded and the judgment of the Division Bench was set aside, with restoration of the Single Judge's order upholding the arbitral award.

Ratio Decidendi: Under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996, a court cannot substitute its own interpretation for a plausible construction adopted by the arbitral tribunal unless the award is perverse or otherwise falls within the narrow grounds for interference.

---