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07 March 2022, Monday

2 years ago

Application of set aside grounds iterated and award partly set aside for jurisdictional error: Supreme Court of India

01 February 2022 | Indian Oil Corporation Ltd v. Shree Ganesh Petroleum | Civil Appeal No 837-838 of 2022 | Indira Banerjee & Abhay S Oka JJ

A 2-judge bench has restated how the set-aside court should act and apply the set-aside grounds.

Following Associate (20150 3 SCC 49 and Ssangyong (2019) 15 SCC 131, it has observed:

  1. There is a distinction between failure to act in terms of a contract and an erroneous interpretation.
  2. If a dispute is validly and lawfully submitted to arbitration, an error in interpreting a contract is an error within the jurisdiction.
  3. The Court does not ordinarily interfere with the tribunal’s interpretation unless patently unreasonable or perverse.
  4. Where a contractual provision is ambiguous or is capable of being interpreted in more ways than one, the court cannot interfere with the arbitral award only because it thinks another possible interpretation would have been a better one.

In the case, it found that the tribunal was appointed under a distributorship agreement, but it made findings on another agreement of lease and had altered the terms of that agreement.

Thus, allowing the appeal and reversing the appellate court’s judgment, the award was set aside insofar as it had increased the monthly lease rent and reduced the lease period.

Read the judgment here.

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Categories: Appealable Orders | Application for Setting Aside Arbitral Award | Arbitrability | Arbitrators Interpretation of Contract | Associate Builders | Dispute Beyond Scope of Submission | Jurisdiction of Arbitral Tribunal | Merits Based Review | Patent Illegality | Plausible View | Reappreciation of Evidence | Revaluation of Evidence | Review on the Merits of the Dispute | Scope of Reference | Section 34 (2) (a) (iv) ACA | Section 34 (2A) | Section 34 ACA | Section 37 ACA | Ssangyong | Unconscionable Contract

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