Cannot appeal for re-assessing or re-approaching evidence against an arbitral award

In Utpal Dasgupta Vs. Mrinal Kanti Sinha, the Hon'ble Calcutta High Court held that ;-

From the above decisions, the following principles emerge:

(a) An Award, which is

(i) Contrary to substantive provisions of law; or

(ii) The provisions of the Arbitration and Conciliation Act, 1996; or

(iii) Against the terms of the respective contract; or

(iv) Patently illegal, or

(v) Prejudicial to the rights of the parties, is open to interference by the Court under S.34(2) of the Act.

(b) Award could be set aside if it is contrary to:

(i) Fundamental policy of Indian Law; or

(ii) The interest of India; or

(iii) Justice or morality;

(iv) The Award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the Court;

(v) It is open to the Court to consider whether the Award is against the specific terms of contract and if so, interfere with it on the ground that it is patently illegal and opposed to the public policy of India.”

Therefore a court does not sit in appeal over the award of an arbitral tribunal by re-assessing or re-approaching the evidence. An award can be challenged only on the grounds mentioned in S.34(2) of the Act.

Elsewhere the Hon'ble court has subdivided Public Policy of India in four separate and distinct sub-heads, namely:-

i) Fundamental Policy of Indian Law;

ii) Interest of India;

iii) Justice or Morality; and

iv) Patent Illegality.

Fundamental Policy of Indian Law was again subdivided in four heads, namely,

i) Compliance with statutes and judicial precedents;

ii) Need of judicial approach;

iii) Natural justice compliance;

iv) Wednesbury reasonableness.

Patent Illegality principle was subdivided in three heads, namely,

i) Contravention of substantive law of India;

ii) Contravention of Arbitration and Conciliation Act, 1996;

iii) Contravention of the terms of the contract.