Arbitrator’s exclusive domain over evidence quantum and plausible contractual interpretation precludes Section 34 interference.

The Petitioner (NHIDCL) and Respondent entered into a Contract Agreement (CA) on 22.02.2021 for consultancy services regarding the Zojila Tunnel project

On 09.04.2021, the Petitioner suspended the Respondent’s services and subsequently issued a Show Cause Notice (SCN) for termination on 07.07.2021, alleging fraudulent practices in the bidding process

The Respondent challenged these actions in W.P.(C) 10268/2021.

During those proceedings, the Petitioner stated it would revoke the suspension, withdraw the fresh tender, and allow the Respondent to continue the work

Following revocation, the Respondent sought payment for the suspension period (April to August 2021) and withheld bills.

Upon the Petitioner's failure to pay, arbitration was invoked

The Arbitrator held the suspension was illegal (not falling under GCC Clause 2.8) and awarded Rs. 5,44,04,340/- for the suspension period, plus litigation costs and interest

The Petitioner challenged this award under Section 34 of the Arbitration and Conciliation Act, 1996

1. Whether the arbitral award was non-speaking or failed to provide adequate reasons as mandated under Section 31(3) regarding the bona fide nature of the suspension

2. Whether the Arbitrator erred in awarding payments for the suspension period despite alleged demobilization of staff and lack of proof of actual salary payments

3. Whether the findings of the Arbitrator regarding staff deployment and the illegality of the suspension were "plausible views" immune from interference under Section 34

The court primarily applied Section 31(3) of the Arbitration and Conciliation Act, 1996, which requires a reasoned award, noting that such reasons can be implied from a fair reading of the award and documents

It applied the limited scope of judicial interference under Section 34, emphasizing that the court does not sit in appeal over an arbitrator’s interpretation of a contract or the quantum of evidence

Furthermore, the court relied on the principle that if a contractual provision is capable of multiple interpretations, the arbitrator’s plausible view must prevail

The court rejected the Petitioner's argument that the award was non-speaking. It held that since the Petitioner had voluntarily revoked the suspension and withdrawn the SCN during writ proceedings, the issue of whether the suspension was bona fide had lost relevance and did not require detailed adjudication by the Arbitrator

Regarding the award for the suspension period, the court found the Petitioner's claim of "demobilization" factually incorrect, citing Respondent’s letters expressing the need to hold staff

The court noted that the Respondent had submitted substantial collateral evidence—including attendance registers, hotel occupancy logs for residential offices, and vehicle rent agreements—to prove staff remained deployed at the site

Since the Petitioner did not dispute these documents but only challenged the lack of direct salary payment proofs, the court ruled that the Arbitrator’s reliance on this evidence to determine deployment was a "plausible view"

The court concluded that the determination of the quantum of evidence falls within the exclusive domain of the Arbitrator and cannot be set aside unless there is "no evidence at all"

It held that the Arbitrator’s findings were reasoned, based on available evidence, and represented a plausible interpretation of the facts and contract

The Court affirmed that the interest granted was consistent with GCC Clause 6.4 and that the litigation costs were within the Arbitrator's discretion under Section 31A(3)

The award was found not to be vitiated by patent illegality, perversity, or conflict with public policy