Court’s Jurisdiction Under Section 37 of Arbitration Act Precludes Reappreciation of Evidence or Merits

The appellant, a registered Co-operative Society, entered into an agreement with the respondent for the procurement and transportation of wheat during 2016-17. The appellant claimed that despite supplying 57,201 quintals, an amount of ₹3,73,977.95 remained unpaid.

The appellant initiated proceedings before the Collector, Harda (Arbitrator), who dismissed the claim on February 13, 2020, citing discrepancies in supply quantities and a failure by the appellant to provide cogent evidence despite multiple notices.

The appellant challenged this under Section 34 of the Arbitration and Conciliation Act, 1996, before the Principal District Judge, Harda. The District Court dismissed the application on July 1, 2022, holding that the Arbitrator’s findings were based on evidence and did not violate public policy.

1. Whether the scope of an appeal under Section 37 of the Arbitration and Conciliation Act, 1996, permits the court to reappreciate evidence or substitute the Arbitrator's view on merits

2. Whether the lower court erred in confirming the award under Section 34 by failing to identify any patent illegality or violation of fundamental policy of Indian law

The court primarily applied Section 37 and Section 34 of the Arbitration and Conciliation Act, 1996

McDermott International Inc vs. Burn Standard Co. Ltd. that the court’s supervisory role is minimal and it cannot correct errors of the arbitrator but only ensure fairness

MMTC Limited vs. Vedanta Limited, which establishes that Section 37 jurisdiction cannot travel beyond the restrictions of Section 34 and concurrent findings should rarely be disturbed

Dyna Technology Pvt. Ltd. v. Crompton Greaves Ltd., emphasizing that arbitral awards should not be interfered with merely because an alternative view on facts exists

Punjab State Civil Supplies Corp. v. Sanman Rice Mills, noting that Section 37 proceedings are summary in nature and not akin to a full-fledged civil appeal

The High Court observed that the scope of Section 37 is extremely restrictive and limited to determining whether the Section 34 court exceeded its jurisdiction or failed to exercise it

the Court found that the District Judge had thoroughly considered all points raised by the appellant

The Court noted that the Arbitrator’s dismissal of the claim was a result of factual findings regarding the discrepancy in wheat quantities and the appellant's failure to substantiate its claims with "cogent evidence"

As the Arbitrator’s view was a "possible view" based on the material available, the Court held that it could not reappreciate the evidence or substitute its own interpretation

The appellant failed to point out any perversity, irregularity, or patent illegality that would meet the high threshold for interference under the Act

The Court affirmed that the lower court’s order under Section 34 was in consonance with the scheme of the Act and was not against public policy. The Arbitration Appeal was dismissed, and no order as to costs was made