Case Note & Summary
The petitioner, a company, challenged an arbitral award passed in favor of the respondent, an individual, under Article 227 of the Constitution of India. The dispute arose from a contract between the parties for supply of goods. The arbitrator found that the petitioner had breached the contract and awarded damages to the respondent under Section 73 of the Indian Contract Act, 1872. The petitioner contended that the award was perverse and based on no evidence. The High Court, after hearing arguments, held that the scope of interference under Article 227 is limited and that the arbitrator's findings were plausible and supported by evidence. The court dismissed the petition, upholding the award.
Headnote
A) Arbitration - Arbitral Award - Challenge under Article 227 - Scope of Interference - The High Court under Article 227 of the Constitution of India will not interfere with an arbitral award unless the findings are perverse, based on no evidence, or contrary to the fundamental policy of Indian law. The court held that the arbitrator's findings on breach and damages were plausible and not open to re-appreciation. (Paras 1-10) B) Contract Law - Breach of Contract - Damages under Section 73 of the Indian Contract Act, 1872 - The arbitrator awarded damages for breach of contract based on evidence of loss suffered by the respondent. The court upheld the award, finding no error in the application of Section 73. (Paras 5-8)
Issue of Consideration
Whether the High Court under Article 227 of the Constitution of India should interfere with an arbitral award that awarded damages for breach of contract, and whether the findings of the arbitrator were perverse or contrary to law.
Final Decision
The High Court dismissed the writ petition, upholding the arbitral award.
Law Points
- Section 73 of the Indian Contract Act
- 1872
- damages for breach of contract
- scope of Article 227 of the Constitution of India
- interference with arbitral awards
- perversity of findings
