An Arbitral Award Cannot Be Interfered With, Over Disagreement On Inference From Evidence

What Is The Case

● Case name - Megha Enterprises vs Haldiram Snacks

● The Delhi High Court has ruled that it cannot intervene with an arbitral award simply because it disagrees with the arbitral tribunal's conclusion based on the facts presented by the parties.

● The Court also held that, under Section 65B of the Indian Evidence Act, 1872, an arbitral tribunal cannot be said to have "grossly erred" if it accepts electronic evidence without an affidavit.

● Justice Vibhu Bakhru presided over a single-judge bench that handed down the decision.

Details

● In this case, the plaintiff, Megha Enterprises, filed a challenge to an arbitral award, claiming that the arbitral tribunal had made a grave error in considering the facts presented by the parties.

● The respondent, Haldiram Snacks, had failed to determine, according to the complainant, that it had allowed someone to forward an email related to the parties' dispute.

● The Indian Evidence Act 1872, according to the Court, does not extend to trials before the arbitrator because of its Section 1.

● The Court also stated that no such objection was raised on behalf of the petitioners before the arbitrator at the required time.

● The Court emphasized that the breadth of an arbitral award's review under Section 34 of the Arbitration and Conciliation Act is exceedingly narrow and that it will not conduct a reappraisal of facts based on patent illegality.

● For the complainant, Senior Advocate P D Gupta appeared alongside Advocate Dhruv Gupta and Harshil Gupta.

● Respondent was represented by lawyers Varun Goswami, Naveen Grover, and Barkha Khattar.

Observation Of The Court

● The Court also held that, under Section 65B of the Indian Evidence Act, 1872, an Arbitral Tribunal cannot be said to have "grossly erred" if it accepts electronic evidence without an affidavit.

● "The Arbitral Tribunal's evaluation of evidence may be incorrect, and this Court may have taken a different view," the Court wrote. "However, that is not the scope of examination under Section 34 of the A&C Act, and this Court cannot interfere with the arbitral award merely because it disagrees with the Arbitral Tribunal's inference drawn from the parties' evidence."

● It also stated that the arbitral award could not be said to be contrary to India's fundamental policy or to be incompatible with justice or morality.

● In this situation, the conflict concerns the straightforward selling and purchase of goods. After finding that the petitioners had not paid for the goods they had bought, the Arbitral Tribunal simply ordered that the said consideration be paid with interest.

● It is common knowledge that a delay in filing a claim just bars the remedy, not the debt. In this light, the Arbitral Tribunal has dismissed Megha's argument that Haldiram is denied its right to pursue what it claims is legitimately due to it after reviewing the evidence.

● Clearly, such an approach would not offend any sense of morality as expressed in the term "public policy" as used in Section 34(2)(6) of the A&C Act, according to the ruling.

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