Case Note & Summary
The petition was filed under Section 34 of the Arbitration and Conciliation Act, 1996, challenging the Arbitral Award dated 11 July 2024. The Arbitral Tribunal partly allowed the Respondent’s claims, awarding Rs.25,27,78,775 with interest and costs. The Petitioner argued that the Award ignored the contractual back‑to‑back payment arrangement under Clause 28(b), misread the letter dated 15 November 2019 as an admission of liability, allowed a time‑barred claim, and failed to account for the Rural Development Department’s write‑off of Rs.17.53 crore. The Petitioner contended that the Award amounted to rewriting the contract and was patently illegal. The judgment was reserved on 21 November 2025 and pronounced on 5 December 2025, but the full text of the court’s analysis and decision is not provided in the extracted portion.
Headnote
Not mentioned due to incomplete judgment text
Issue of Consideration
Whether the arbitral award warrants interference under Section 34 of the Arbitration Act on grounds of patent illegality, ignoring contractual terms and misreading evidence?
Law Points
- Arbitration Award Challenge
- Section 34
- Patent Illegality
- Contractual Interpretation
- Back-to-Back Payment
- Admission of Liability
- Perverse Reading of Evidence
- Limitation
Case Details
2025 LawText (BOM) (12) 83
Commercial Arbitration Petition (L) No. 33165 of 2024 with Interim Application (L) No. 33727 of 2024
Mr. Kevic Setalwad, Senior Advocate with Mr. Jahan Lalkaka, Mr. Kunal Bhanage, Ms. Ayushi Doshi, Ms. Riya Pichaya and Mr. Animish Dighe i/b M/s. Indialaw LLP for the Petitioner; Ms. Alpana Ghone with Mr. Rashmin Khandekar, Mr. M.A. Kamdar, Mr. Hersh Choksi and Mr. Krishit Nandu i/b M/s. Kanga & Co. for the Respondent.
Aksentt Tech Services Limited
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Challenge to Arbitral Award under Section 34 of the Arbitration and Conciliation Act, 1996.
Remedy Sought
Petitioner (MahaOnline Limited) sought to set aside the Arbitral Award dated 11 July 2024 granting Rs.25,27,78,775 with interest at 8% p.a. and costs of Rs.25,00,000 to the Respondent (Aksentt Tech Services Limited).
Filing Reason
Petitioner alleged that the Arbitral Tribunal ignored contractual clauses making payment contingent on receipt from Rural Development Department, misread evidence, and the award suffered from patent illegality.
Previous Decisions
Arbitral Tribunal constituted on 13 September 2019; Award passed on 11 July 2024 partly allowing Respondent's claims.
Issues
Whether the Arbitral Award ignored the back-to-back payment mechanism under Clause 28(b) of the Business Associate Agreement?
Whether the Arbitral Tribunal misread the letter dated 15 November 2019 as an admission of liability?
Whether the claim was barred by limitation?
Whether the Arbitral Tribunal awarded amounts not specifically claimed and ignored the write-off by the Rural Development Department?
Whether the Award amounts to rewriting the contract and is patently illegal?
Submissions/Arguments
The impugned Award ignored contractual clauses requiring payment to Respondent only after release of amounts by RDD; Petitioner had no independent obligation to pay.
The Arbitral Tribunal erroneously construed Clause 28(b) as a mere payment mechanism rather than a condition precedent.
The Award rewrote the contract and fell foul of Section 34, relying on PSASICAL Terminals Pvt. Ltd. v. Board of Trustees of V.O. Chidambaranar Port Trust Tuticorin and others.
The Arbitral Tribunal ignored evidence of back-to-back payments and failed to consider that the claim was barred by limitation.
The Award granted Rs.25,27,78,775 solely on the basis of Petitioner’s letter dated 15 November 2019, which was not an admission of liability and was misread in a perverse manner.
Respondent led no independent evidence to prove its claim; the said amount was not claimed in the Statement of Claim; no invoices were produced; the letter used the word 'approximate'.
Even if the amount was due, the RDD had not approved work worth Rs.17.53 crore, which was written off and could not be claimed from Petitioner.
Petitioner was entitled to 6.5% commission, which the Respondent admitted, but the Arbitral Tribunal ignored these admissions and awarded the full amount.
Judgment Excerpts
By the impugned Award, the learned Arbitrator has awarded claim in favour of the Respondent in the sum of Rs.25,27,78,775/- alongwith interest @8% p.a. from the date of filing of the statement of claim till realisation.
Mr. Setalwad... submit that the impugned Award is passed by ignoring the contractual clauses, under which the Respondent was to be paid only after release of the amounts by RDD.
The learned Arbitrator has erroneously construed Clause 28(b) of the Agreement to mean a mere mechanism for releasing the payment when in fact the said clause is the arrangement agreed between the parties for making payments to the Respondent.
Procedural History
On 13 June 2019, Respondent filed Commercial Arbitration Application No.276 of 2019 under Section 11 of the Arbitration Act. Arbitral Tribunal constituted on 13 September 2019. Respondent filed Statement of Claim. Parties led evidence. Arbitral Award dated 11 July 2024 partly allowed claims. Petitioner filed the present Section 34 petition.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 34, Section 11
