Case Note & Summary
The petitioner, Bombay Construction and Engineering Pvt. Ltd., filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996 challenging an arbitral award dated 24 February 2010 passed by a three-member Arbitral Tribunal of the National Stock Exchange of India Limited (NSEIL). The dispute arose out of stock broking transactions where the petitioner had appointed respondent No.1, Mehta Finstock Pvt. Ltd., to effect transactions on the Futures & Options Segment of NSEIL. The respondent squared off the petitioner's outstanding positions on 22 January 2008, leading to differences. The petitioner filed a complaint with NSEIL, and the respondent filed a claim. The petitioner filed a written statement and a counter claim for Rs.52,59,030.79 with interest. The arbitral tribunal directed the petitioner to pay Rs.53,76,751.46 with interest at 12% p.a. from 20 February 2008 till realization and rejected the counter claim. The petitioner challenged the award on grounds that it was contrary to public policy and suffered from patent illegality, arguing that the tribunal failed to consider evidence and that the award was perverse. The court, after hearing arguments, held that the scope of interference under Section 34 is limited and that the court cannot reappreciate evidence or substitute its own view. The court found that the award was based on evidence and was not perverse or contrary to public policy. The petition was dismissed with no order as to costs.
Headnote
A) Arbitration - Challenge to Arbitral Award - Section 34 of the Arbitration and Conciliation Act, 1996 - Scope of Interference - The court considered whether the arbitral award could be set aside on grounds of public policy or patent illegality - Held that the court cannot reappreciate evidence or substitute its own view; interference is limited to grounds under Section 34 - The award was found to be based on evidence and not perverse (Paras 1-10). B) Arbitration - Counter Claim - Rejection by Arbitral Tribunal - The petitioner's counter claim was rejected by the tribunal - The court held that the tribunal's findings on the counter claim were based on material on record and not open to challenge under Section 34 - No patent illegality or perversity found (Paras 2-8).
Issue of Consideration
Whether the arbitral award dated 24 February 2010 passed by the Arbitral Tribunal of National Stock Exchange of India Limited is liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996 on the grounds of being contrary to public policy or suffering from patent illegality.
Final Decision
The petition is dismissed. No order as to costs.
Law Points
- Section 34 of the Arbitration and Conciliation Act
- 1996
- Public Policy
- Patent Illegality
- Reappreciation of Evidence
- Arbitral Award Challenge
