Summary
The Court restored an arbitral award directing payment of Rs9.5 lakh in a beverage-supply and brand-promotion dispute. The High Court had exceeded its limited jurisdiction under Section 37 by reassessing the merits as though hearing an ordinary appeal from a civil decree. None of the public-policy or patent-illegality grounds considered by the Court arose on the facts. The respondent also could not reopen an arbitrator-jurisdiction objection rejected by the High Court without appealing that adverse determination.
Issues
- Whether the High Court exceeded its limited arbitral appellate jurisdiction by reconsidering the claim’s merits.
- Whether the respondent could reopen a jurisdiction objection rejected in an unchallenged determination.
Provisions considered
- Section 37, Arbitration and Conciliation Act, 1996The appellate court could not reassess the claim as an ordinary civil appeal; no permissible ground for disturbing the award was established. (¶ 7-9)
Held
- The arbitrator-jurisdiction objection had been rejected by the High Court and the respondent had not appealed that determination. It could not reopen the objection in the original claimant’s appeal in these circumstances. (¶ 6)
- An appeal under Section 37 does not authorise a fresh decision on the merits of the underlying claim as in an ordinary appeal from a decree. The High Court adopted that impermissible approach. None of the fundamental-policy, interest-of-India, justice-or-morality or patent-illegality grounds examined by the Court applied on these facts. (¶ 7-8)
- The award and the Additional District Judge’s order rejecting the Section 34 objections were restored. This also preserved the arbitrator’s rejection of the respondent’s counterclaim. (¶¶ 2.2, 9-10)
Result
Appeal allowed; High Court judgment set aside; arbitral award and order rejecting Section 34 objections restored; no costs.