Cannot interfere with arbitral award on account of disagreement over inference drawn from evidence: Delhi High Court
The Delhi High Court has ruled that it cannot intervene with an arbitral award merely on the ground that it does not coincide with the inference drawn by the arbitral tribunal from the evidence led by the parties (Megha Enterprises vs Haldiram Snacks).
The Court also held that an arbitral tribunal cannot be said to have "grossly erred" if it has accepted electronic evidence without an affidavit under Section 65B of the Indian Evidence Act, 1872.
The judgement was passed by a Single-Judge Bench of Justice Vibhu Bakhru.
In the present case, a challenge to an arbitral award was mounted by the petitioner, Megha Enterprises, essentially on the ground that the arbitral tribunal had totally erred in evaluating the evidence led by the parties.
As per the petitioner, the respondent, Haldiram Snacks, had failed to establish that it had authorized anyone to forward an email pertaining to the dispute between the parties.
The Court opined that in terms of its Section 1, the Indian Evidence Act 1872 would not apply to proceedings before the arbitrator.
Further, the Court said that no such objection was taken on behalf of the petitioners before the arbitrator, at the appropriate stage.
The Court reiterated that the scope of examination of an arbitral award under Section 34 of the Arbitration and Conciliation Act is extremely limited, and it would also not undertake the exercise of re-appreciation of evidence on the ground of patent illegality.
The Court said, "The evaluation of evidence by the Arbitral Tribunal may be erroneous and perhaps this Court may have taken a different view but that is not the scope of examination under Section 34 of the A&C Act and, this Court cannot interfere with the arbitral award merely on the ground that it does not concur with the inference drawn by the Arbitral Tribunal from the evidence led by the parties.”
It also opined that it could not be said that the arbitral award was contrary to the fundamental policy of India, or was opposed to justice or morality.
The judgement stated, "The dispute in the present case relates to a simple transaction of sale and purchase of goods. All that the Arbitral Tribunal has done is, after having found that the petitioners had not paid for the goods purchased by them, awarded that the said consideration be paid with interest. It is trite that a delay in filing a claim only bars the remedy, it does not extinguish any debt. Viewed in this perspective, the Arbitral Tribunal has after evaluating the material, rejected Megha‟s contention that Haldiram be denied its remedy to seek what it claimed to be legitimately due to it. Obviously, there is no question of such an approach offending any sense of morality as is embodied in the expression "public policy‟ as used in Section 34(2)(6) of the A&C Act."
The petition was dismissed by the Court as no further ground for interference were found.