2018 (1) TMI 1763 - SC - Indian Laws

Section 37 appeal cannot reappreciate evidence; Section 34 review is limited, so arbitral award must be upheld.

SC allowed the appeal, set aside the High Court's order that had overturned the arbitral award, and affirmed the trial court's Section 34 judgment ... Dismissal of application under Section 34 of the Arbitration and Conciliation Act, 1996, reversed by the High Court in an appeal under Section 37 of the Act - HELD THAT:- The jurisdiction of the High Court in appeal under Section 37 of the Act would naturally be limited to what has been conferred under Section 34 of the Act insofar as an appeal against an order setting aside or refusing to set aside the award is concerned. A reading of the materials placed on record, including the award and the order passed under Section 34 of the Act, would disclose that the view taken by the arbitrator is on a consideration of the evidence and materials placed before him and the conclusion that the respondents are liable to compensate the appellants is a possible and reasonable conclusion. This is precisely what has been held by the Court while exercising jurisdiction under Section 34 of the Act. If that is so, we do not see how in an appeal under Section 37 of the Act, the High Court could have reappreciated the evidence to come to a contrary finding. The High Court was not sitting in appeal over the award of the arbitrator but it is the order passed under Section 34 of the Act, which was the subject matter of challenge before the High Court. The High Court seems to have missed the subtle difference between the two jurisdictions and thereby committed an error which would require to be corrected in this appeal. The order of the High Court set aside and the award and the order passed by the learned trial court under Section 34 of the Act affirmed. The appeal, consequently, is allowed. The challenge was to a High Court order reversing the trial court's refusal to set aside an arbitral award under the Arbitration and Conciliation Act, 1996. The Court reiterates the 'highly constricted power' of civil courts under Section 34, noting that 'the role of the Court should be restricted to the bare minimum.' Interference is justified only for 'commission of misconduct by the arbitrator which can find manifestation in different forms including exercise of legal perversity by the arbitrator.' Examination of the award and the Section 34 order showed the arbitrator's conclusion - that the respondents were liable to compensate the appellants - was based on consideration of evidence and was a 'possible and reasonable conclusion.' Consequently, the High Court erred in reappreciating evidence in an appeal under Section 37, for which it lacked authority. The High Court's order is set aside; the award and the trial court's Section 34 order are affirmed. If the award amount was realized pursuant to the High Court order, appellants are entitled to restitution forthwith.