Summary
The refusal to review the judgment setting aside domestic arbitral awards was upheld. The 2015 amendments applied, but patent illegality remained available where the arbitrator’s contractual construction was not even a possible view. The High Court had applied that surviving test to awards ignoring vital clauses and relying on irrelevant considerations. Its citation of the displaced Western Geco approach did not establish an error apparent when the judgment was read as a whole.
Issues
- Whether the 2015 amendments displaced the ground on which the domestic awards were set aside.
- When contractual interpretation amounts to patent illegality.
- Whether the review orders disclosed an error warranting interference.
Provisions considered
- Section 34(2A), Arbitration and Conciliation Act, 1996Applied the statutory patent-illegality standard and its prohibition on setting aside merely for erroneous law or reappreciation of evidence. (¶¶ 15, 18, 19, 20, 21, 22, 26)
Held
- The amended provisions applied to the section 34 applications filed after 23 October 2015. Patent illegality remained a carefully limited ground for domestic awards other than international commercial arbitration awards; it was unavailable as a foreign-award enforcement defence. Mere erroneous application of law or reappreciation of evidence was insufficient. (¶¶ 15, 18, 19, 20)
- Construction of a contract is primarily for the arbitrator. Intervention is permissible where the construction is one no fair-minded or reasonable person could adopt, so that it is not even a possible view, or where the arbitrator travels outside the matters allotted by the contract. (¶¶ 17, 21, 22)
- The High Court’s conclusion of irrationality and perversity rested on the arbitrator’s disregard of vital contractual clauses and reliance on irrelevant factors. Read holistically, it applied the surviving Associate Builders test reaffirmed in Ssangyong; reference to Western Geco, no longer good law, did not change the operative basis of the decision. (¶¶ 23, 24, 25, 26, 27)
- No error apparent in the substantive judgment was established and the review petitions were rightly dismissed. The Court expressly declined to decide the separate question of maintainability of special leave petitions against review rejection after the earlier challenge to the main judgment had failed. (¶¶ 12, 28, 29)
Result
All special leave petitions dismissed; refusal to review the judgment setting aside the awards left undisturbed. No order as to costs.