Case Note & Summary
The National Centre for Biological Sciences (NCBS) filed an appeal under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 (A&C Act) against an order dated 28.04.2025 passed by the LXXXIII Additional City Civil and Sessions Judge, Commercial Court at Bengaluru (Commercial Court) in Com. A.P No.186/2024. The Commercial Court had dismissed NCBS's petition under Section 34 of the A&C Act seeking to set aside an arbitral award dated 31.08.2024 passed by an arbitral tribunal comprising Respondent No.2 as the sole arbitrator (Arbitral Tribunal). The Arbitral Tribunal had partly allowed the claims of Respondent No.1 (URC Constructions Private Limited) and awarded a sum of ₹3,52,50,404/-. The dispute arose out of a construction contract between NCBS and URC. URC claimed additional payment for work done beyond the scope of the contract. The Arbitral Tribunal found that URC was entitled to additional payment for certain items of work. NCBS challenged the award on grounds of patent illegality and public policy. The Commercial Court dismissed the petition, holding that the award did not suffer from any infirmity. In the present appeal, the High Court examined the scope of interference under Section 34 and Section 37 of the A&C Act. The court held that the appeal under Section 37(1)(c) is maintainable. On merits, the court found that the Arbitral Tribunal's findings were based on evidence and were not perverse. The court noted that the scope of interference with an arbitral award is limited and that the Commercial Court had correctly refused to set aside the award. The High Court dismissed the appeal, upholding the order of the Commercial Court and the arbitral award.
Headnote
A) Arbitration Law - Appeal under Section 37(1)(c) - Maintainability - Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 - The appeal under Section 37(1)(c) is maintainable against an order refusing to set aside an arbitral award under Section 34. The court held that the appeal is maintainable and proceeded to examine the merits. (Para 1) B) Arbitration Law - Challenge to Arbitral Award - Scope of Interference - Section 34 of the Arbitration and Conciliation Act, 1996 - The court reiterated that the scope of interference with an arbitral award under Section 34 is limited to grounds specified therein, including patent illegality and public policy. The court found no such grounds established. (Paras 2-3) C) Arbitration Law - Arbitral Award - Construction Dispute - Claim for Additional Payment - Section 34 of the Arbitration and Conciliation Act, 1996 - The Arbitral Tribunal partly allowed the claim of the contractor for additional payment for work done beyond the contract. The court held that the findings of the Arbitral Tribunal were based on evidence and not perverse, and thus not liable to be interfered with. (Paras 2-3)
Issue of Consideration
Whether the Commercial Court erred in dismissing the petition under Section 34 of the Arbitration and Conciliation Act, 1996 challenging the arbitral award, and whether the present appeal under Section 37(1)(c) of the Act is maintainable.
Final Decision
The High Court dismissed the appeal, upholding the order of the Commercial Court dated 28.04.2025 and the arbitral award dated 31.08.2024.
Law Points
- Section 37(1)(c) of Arbitration and Conciliation Act
- 1996
- Section 34 of Arbitration and Conciliation Act
- Scope of interference with arbitral awards
- Public policy ground under Section 34(2)(b)(ii)
- Patent illegality ground under Section 34(2A)
