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Issues: (i) Whether the arbitral award suffered from patent illegality or perversity warranting interference under Section 34 of the Arbitration and Conciliation Act, 1996; (ii) Whether the award was vitiated because the contracts were unstamped or under-stamped and because GST had been charged for supplies made before the GST regime.
Issue (i): Whether the arbitral award suffered from patent illegality or perversity warranting interference under Section 34 of the Arbitration and Conciliation Act, 1996.
Analysis: The challenge was examined in the light of the limited scope of interference under Section 34. An award can be set aside only when the illegality goes to the root of the matter, the view taken is not even plausible, the tribunal travels beyond the contract or the reference, or the finding is based on no evidence or ignores vital evidence. Re-appreciation of evidence is impermissible, and a reasonable construction of the contract by the arbitral tribunal cannot be substituted by the court merely because another view is possible. On the facts, the tribunal had considered the contracts, the conduct of the parties, the delays in clearance, the supplementary arrangement, and the evidence placed before it. No perversity or patent illegality was shown.
Conclusion: The award did not warrant interference on this ground and the issue was answered against the petitioner.
Issue (ii): Whether the award was vitiated because the contracts were unstamped or under-stamped and because GST had been charged for supplies made before the GST regime.
Analysis: The objection regarding stamping did not dislodge the award because the contracts had been acted upon and the dispute was over amounts payable under performed transactions. The legal position on the effect of non-stamping or under-stamping of arbitration agreements was noted, but no ground for setting aside the award was made out. As to GST, the tribunal treated the incorrect GST reference as, at most, an avoidable mistake and the court found no material illegality causing prejudice so as to invalidate the award.
Conclusion: Neither the stamping objection nor the GST-related objection justified interference, and the issue was answered against the petitioner.
Final Conclusion: The arbitral award was upheld in exercise of the limited jurisdiction under Section 34, and the challenge to the award failed.
Ratio Decidendi: A court exercising jurisdiction under Section 34 cannot reappreciate evidence or substitute its own contractual interpretation for a plausible view taken by the arbitral tribunal; interference is justified only when the award is perverse, beyond the contract, or tainted by patent illegality going to the root of the matter.
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