It is to be noted that an 'Arbitral Tribunal' is the 'Final Arbitrator' of both the questions of 'Fact and Law' referred to it for determination. The decision of the Arbitrator, being the select judge of the parties, is ordinarily final both on 'Facts and Law' and should not be lightly interfered with. Likewise, the Review in Court would not be justified to interfere with the Award merely because the views taken by the Arbitrator on the question of fact or law does not accord well within its own views. As a matter of fact, the 'Reviewing Court' is to accept the decision an Arbitrator as long as he had acted within jurisdiction in interpreting the provisions of the Contract and had applied the law to his evaluation of the facts. Indeed, the Arbitration and Conciliation Act, 1956 makes provision for the supervisory role of the courts for review of the 'Arbitral Award' only to ensure fairness as per decision McDermott International Inc. V. Burn Standard Co., Ltd., and Others MANU/SC/8177/2006 : (2006) 11 Supreme Court Cases 181.
It is to be borne in mind that an Arbitrator is the master of 'Facts and Law'. As such, the findings of fact recorded by the 'Arbitral Tribunal' are conclusive and final. It cannot be gainsaid that the finding of fact cannot be assailed on the grounds of admissibility, relevance, materiality and weight of any evidence. In fact, the Arbitration and Conciliation Act, 1996 does not provide for recourse against an 'Arbitral Award' on the facts or for any 'Judicial Review' of the award on its merits. If the Tribunal had jurisdiction, the correct procedures were adhered to, and the correct formalities are observed, the award - good, bad or indifferent is final and binding on the parties. It is not open to a Court of Law to examine the correctness of the award on merits with reference to the materials produced before the Arbitral Tribunal, nor can it re-examine or re-assess the materials on record to see the correctness of the view taken by the Tribunal.
Furthermore, the jurisdiction of a Court of Law to set aside an Arbitral Award under Section 34 of the Arbitration and Conciliation Act, 1996 is not an Appellate one and added further, it cannot interfere with erroneous on fact either in the absence of perversity. It is restricted to the grounds adumbrated in it, in the considered opinion of this Court. Also that if the award is passed fairly, after providing adequate opportunities to the respective parties to project their points of view in the manner provided by the Arbitration agreement, the Award is not amenable to correction by a Court of Law. Also in the decision of Delhi State Industrial & Infrastructure Development Corporation Limited reported in (2014) 3 Arb LR 116 (Delhi) (Division Bench) at Paragraph No. 9, it is observed and held as follows:--
"9. We may further add that the parties, by agreeing to be bound by the arbitral award and by declaring it to be final, agree to be bound also by wrong interpretation or an erroneous application of law by the arbitral tribunal and once the parties have so agreed, they cannot apply for setting aside of the arbitral award on the said ground. Even under the 1940 Act where the scope of interference with the award was much more, the Apex Court in Tarapore and Co., V. Cochin Shipyard Ltd., Cochin, MANU/SC/0002/1984 : (1984) 2 SCC 680 : 1985 Ar.LR 2 (SC) and U.P. State Electricity Board, MANU/SC/0541/1988 : (1989) 1 SCC 359 : 1989 (1) Arb. LR 244 (SC) held that the arbitrator's decision on a question of law is also binding even if erroneous. Similarly, in N. Chellappan V. Secretary, Kerala State Electricity Board, MANU/SC/0002/1974 : (1975) 1 SCC 289, it was held that even if the umpire committed an error of law in granting amount, it cannot be said to be a ground challenging the validity of the award; the mistake may be a mistake of fact of law."
However, a Court of Law can set aside the 'Award' only if it is apparent from the award that there is no evidence to support the conclusions or if the award is cemented on any legal view which is latently and patently an erroneous one.
If an Arbitrator fails to adjudicate a counter claim and does not consider it, then 'Award' is liable to be set aside in terms of the Arbitration and Conciliation Act, 1996 [26 of 1996]. An 'Arbitrator' is not only required to decide a counter claim but is also required to assail reasons for his decisions.
Factors to be Borne in Mind by an Appellate Court
31. When an Appellate Court deals with the 'Award' assailed in an 'Appeal' it is to bear in mind fully the salient factors:--
"(i) A Court of Law cannot substitute its own decision as if sitting in Appeal over the Award.
(ii) Ambit of interference that the 'Award' is limited.
(iii) A Court of Law is to look into whether there is any negation of the 'Principles of Natural Justice'.
(iv) A Court of Law can interfere only if there is an error on the face of the 'Award'.
(v) A Court of Law can interfere if an 'Arbitrator' had brushed aside/ignored the relevant clause and the terms of the agreement.
(vi) The Award is cemented on a proposition of Law which is erroneous.
(vii) An award could not be set aside just because the reasons are spelt out in brief.
(viii) Interpretation placed by the Arbitrator ought not be disturbed if it is plausible and not because a Court of Law would have come to a different conclusion.
(ix) No interference would be called for when an Arbitrator renders a finding on a particular question of Law when authorised by the concerned parties.
(x) A Court of Law should not disturb the 'Findings' of the Arbitrator when based on facts.
(xi) There must not be a reappreciation of the evidence by a Court of Law, in as much as the same was considered by an Arbitrator."
IN THE HIGH COURT OF MADRAS
O.S.A. No. 159 of 2015
Decided On: 01.12.2015
Appellants: Jeypore Sugar Company Ltd.
Vs.
Respondent: Laxmi Organic Industries Limited and Ors.
Hon'ble Judges/Coram:S. Manikumar and M. Venugopal, JJ.
Citation:AIR 2016 (NOC)288 Mad
