Can the Court Substitute Its Views with the Views of the Arbitrator?
Jurisdiction of the Court under section 34 of the Arbitration and Conciliation Act 1996 – Can the Court substitute its views with the views of the arbitrator
In a recent judgment delivered by the Delhi High Court in the case of Indian Railway Catering & Tourism Corporation (IRCTC) Ltd. Vs. Deepak and Co., the points that arose for consideration were, firstly, the scope of the court to interfere in the award passed by an arbitrator in arbitration proceedings and secondly, whether the court is entitled to substitute its views with the views of the arbitrator while entertaining a petition under section 34 of the Arbitration and Conciliation Act 1996 (hereinafter the Act).
Deepak and Co. (DC), the respondent in the present case, is a private catering service provider to the IRCTC, who had emerged as the highest bidder in a limited tender published by IRCTC inviting bids for providing on-board catering services in respect of Train No. 12951- 52/12953-54 (Rajdhani/August Kranti Express) for six months on 07 September 2017. Further, there was a policy change by IRCTC which required that catering service providers to supply welcome drink to the passengers at no extra cost and DC was given an option to revoke the license in case they were unwilling to comply with the changed policy. IRCTC also obtained an unconditional acceptance of the same from DC. DC submitted the acceptance but later invoked the arbitration clause and raised three different claims, the sole arbitrator allowed two out of the three claims on 15th December 2020, against which IRCTC had filed a petition challenging the award of the arbitrator.
The Delhi High Court reiterated the legal position that once a matter is decided finally by arbitration, then the same shall not be re-examined by the court under section 34 of the act. The Court was further of the view that there is no illegality in the impugned award and that even when two interpretations are possible, the court would not substitute the view of the Arbitrator with its own view unless the view taken by the Arbitrator is perverse and unreasonable.
