Cannot interfere with arbitral award on account of disagreement over inference drawn from evidence: Delhi High Court

7th May,2021


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 simply because it disagrees with the arbitral tribunal's conclusion based on the facts presented by the parties (Megha Enterprises vs Haldiram Snacks). The Court also held that, under Section 65B of the Indian Evidence Act, 1872, an arbitral tribunal cannot be said to have "grossly erred" if it accepts electronic evidence without an affidavit. Justice Vibhu Bakhru presided over a single-judge bench that handed down the decision. In this case, the plaintiff, Megha Enterprises, filed a challenge to an arbitral award, claiming that the arbitral tribunal had made a grave error in considering the facts presented by the parties. The respondent, Haldiram Snacks, had failed to determine, according to the complainant, that it had allowed someone to forward an email related to the parties' dispute. The Indian Evidence Act 1872, according to the Court, does not extend to trials before the arbitrator because of its Section 1. The Court also stated that no such objection was raised on behalf of the petitioners before the arbitrator at the required time. The Court emphasised that the breadth of an arbitral award's review under Section 34 of the Arbitration and Conciliation Act is exceedingly narrow, and that it will not conduct a reappraisal of facts based on patent illegality. The Arbitral Tribunal's evaluation of evidence may have been incorrect, and 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 simply because it disagrees with the Arbitral Tribunal's inference drawn from the parties evidence, the Court states. It also stated that the arbitral award could not be said to be contrary to India's fundamental policy, or to be incompatible with justice or morality.