Contractual coverage cannot be rewritten in arbitration, and unsupported quantification can render an award vulnerable under Section 34.

An arbitral award was found vulnerable where it extended accidental damage cover despite non-compliance with the contract's twin conditions of timely premium payment and furnishing product details. Treating mobile phones and laptops as covered on terms different from the agreement was treated as rewriting the contract and amounted to patent illegality. The award was also attacked for lack of evidentiary support and for failing to give reasons for quantifying the claims, because invoices, repair papers and an expert report did not establish accidental damage or a rational basis for deductions. The Section 34 petition succeeded and the award was set aside.

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Issues: (i) Whether the arbitral award was liable to be set aside on the ground that it rewrote the contract by granting accidental damage cover despite non-compliance with the contractual conditions for coverage. (ii) Whether the award was unsustainable for want of evidence and for failure to give reasons for the quantification of the claims.

Issue (i): Whether the arbitral award was liable to be set aside on the ground that it rewrote the contract by granting accidental damage cover despite non-compliance with the contractual conditions for coverage.

Analysis: The contract required timely payment of premium and furnishing of product details as twin conditions for coverage under the accidental damage cover scheme. The subsistence of the agreement did not dispense with those conditions. By treating mobile phones and laptops as covered even though the mandatory requirements were not satisfied, the award effectively diluted the contractual stipulation and travelled beyond the agreed terms. Such a course amounted to patent illegality.

Conclusion: The finding extending coverage contrary to the contract was unsustainable and was against the petitioner.

Issue (ii): Whether the award was unsustainable for want of evidence and for failure to give reasons for the quantification of the claims.

Analysis: The tribunal accepted the claims on the basis of an expert report even though the quantification was not established by evidence and the award did not record any rational basis for the substantial reductions and deductions made while computing the amount. The sale invoices and repair documents did not prove accidental damage, and the respondent failed to discharge the burden of showing that the claimed repairs were covered under the accidental damage scheme. A reasoned award under the Arbitration and Conciliation Act, 1996 must disclose the basis of quantification, and an award founded on no evidence or unsupported guesswork cannot stand.

Conclusion: The award was invalid for want of evidentiary support and reasons, and this issue was decided against the respondent.

Final Conclusion: The arbitral award suffered from patent illegality and perversity, and the petition under Section 34 succeeded, resulting in the award being set aside.

Ratio Decidendi: An arbitral award is vulnerable under Section 34 of the Arbitration and Conciliation Act, 1996 if it grants relief by rewriting the contract or if it is unsupported by evidence and does not disclose a rational basis for quantification, because a reasoned award must remain within the contractual framework and the evidentiary record.

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