ATLANTA LIMITED THR. ITS MANAGING DIRECTOR versus UNION OF INDIA REPRESENTED BY CHIEF ENGINEER MILITARY ENGINEERING SERVICE

Citation: [2022] 1 S.C.R. 609 · Decided: 18-01-2022 · Supreme Court of India · Bench: N.V. RAMANA · Disposal: Disposed off

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Judgment (excerpt)

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[2022] 1 S.C.R. 609
609
ATLANTA LIMITED THR. ITS MANAGING DIRECTOR
v.
UNION OF INDIA REPRESENTED BY CHIEF ENGINEER
MILITARY ENGINEERING SERVICE
(Civil Appeal No. 1533 of 2017)
JANUARY 18, 2022
[N. V. RAMANA, CJI, A. S. BOPANNA AND
HIMA KOHLI, JJ.]
Administrative Law: Judicial review – Scope of – Interference
with the arbitral award – Held: Is limited – Award passed by an
Arbitrator can be challenged only on grounds specified in ss.30
and 33 of the Arbitration Act, namely, when there is an error on the
face of the Award or when the Arbitrator has mis-conducted himself
or the proceedings – Nor can the Court substitute its own view on
the conclusion of law or facts as against those drawn by the
Arbitrator, as if it is sitting in appeal – Arbitration Act, 1940.
Arbitration: Arbitrator is the final arbiter of the disputes
between the parties and it is not open to a party to challenge the
Award on the ground that he has drawn his own conclusions or has
failed to appreciate certain facts – It is beyond the jurisdiction of
the Appellate Court to assign to itself, the task of construing the
terms and conditions of the contract and its provisions and take a
view on certain amounts awarded in favour of a party – As long as
the Arbitrator has taken a possible view, which may be a plausible
view, simply because a different view from that taken in the Award,
is possible based on the same evidence, would also not be a ground
to interfere in the Award – In the instant case, the Sole Arbitrator
had given certain cogent reasons for awarding the amount in favour
of the appellant-claimant towards idle hire charges of the parts of
the machineries and equipments and loss of machinery – It was
beyond the domain of the Appellate Court to have examined the
reasonableness of the said reasons by reappreciating the evidence
to arrive at a different conclusion – Having regard to the fact that
amounts have been awarded in favour of the appellant-claimant on
the above heads, based on the Report submitted to the Court by the
Court Commissioner for valuing the tools and machinery and
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610
SUPREME COURT REPORTS
[2022] 1 S.C.R.
premised on the formula offered by the appellant-claimant for
arriving at the idle hire charges, both being undisputed, there is no
good reason for the Appellate Court to have interfered in the manner
it did – Arbitration Act, 1940.
Disposing the appeal, the Court
HELD: 1.1 Court does not sit in appeal over an Award
passed by an Arbitrator and the only grounds on which it can be
challenged are those that have been specified in Sections 30 and
33 of the Arbitration Act, namely, when there is an error on the
face of the Award or when the Arbitrator has mis-conducted
himself or the proceedings. [Para 10][619-F-G; 620-A]
NTPC Ltd. v. Deconar Services Pvt. Ltd. (2021) SCC
Online SC 498 Food Corporation of India v. Sreekanth
Transport (1999) 4 SCC 491 : [1999] 3 SCR 699;
Kwality Manufacturing Corporation v. Central
Warehousing Corporation (2009) 5 SCC 142; Assam
State Electricity Board and Others v. Buildworth Private
Limited (2017) 8 SCC 146 : [2017] 7 SCR 123–
referred to.
1.2 It is also a well-settled principle of law that challenge
cannot be laid to the Award only on the ground that the Arbitrator
has drawn his own conclusion or failed to appreciate the relevant
facts. Nor can the Court substitute its own view on the conclusion
of law or facts as against those drawn by the Arbitrator, as if it is
sitting in appeal. As long as the Arbitrator has taken a possible
view, which may be a plausible view, simply because a different
view from that taken in the Award, is possible based on the same
evidence, would also not be a ground to interfere in the Award.
[Paras 12, 13][621-B-C; 622-B-C]
State of Rajasthan v. Puri Construction Co. Ltd. And
Another (1994) 6 SCC 485 : [1994] 3 Suppl. SCR 616;
Arosan Enterprises Ltd. v. Union of India and Another
(1999) 9 SCC 449 : [1999] 2 Suppl. SCR 621,
Municipal Corporation of Delhi v. Jagan Nath Ashok
Kumar and Another (1987) 4 SCC 497 : [1988] 1
SCR 180 – referred to.
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2.1 Once the Sole Arbitrator had interpreted the clauses of
the contract by taking a particular view and had gone to great
length to analyse several reasons offered by the appellant-claimant
to justify its plea that it was entitled for extension of time to
execute the contract, the Division Bench of the High Court ought
not to have sat over the said decision as an Appellate Court

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