Courts cannot interfere with an arbitrator’s plausible interpretation of contractual clauses unless patently illegal.

The Appellant entered into a Share Purchase Agreement (SPA) dated 30.03.2010 to purchase a 20% stake in Respondent No. 1 for ₹10,00,000.

Clause (l) of the SPA provided an "option to exit" at the end of five years by transferring shares to the promoters for a fixed value of ₹35,00,000.

Clause (m) stipulated that the SPA was valid for five years unless renewed in writing.

The Appellant failed to exercise the exit option by the expiry date (30.03.2015) and only issued an exit notice on 01.08.2018.

The Sole Arbitrator dismissed the Appellant's claim for ₹35,00,000, holding the option was a qualified one that had to be exercised strictly at the end of the five-year period.

The Commercial Court subsequently dismissed the Appellant’s Section 34 petition on 28.09.2022.

The Appellant then filed this appeal under Section 37 of the Arbitration and Conciliation Act with an 85-day delay.

1. Whether the delay of 85 days in filing the Section 37 appeal should be condoned under Section 5 of the Limitation Act.

2. Whether the Arbitral Tribunal’s interpretation of Clauses (l) and (m) of the SPA—concluding that the exit option was time-bound and had expired—was patently illegal or perverse.

The Court applied the "sufficient cause" standard for condonation of delay in commercial disputes as established in State of Maharashtra v. Borse Bros. Engineers & Contractors (P) Ltd., which mandates that delay should be condoned only as an exception and requires a strict, bona fide explanation.

Regarding the scope of judicial interference under Sections 34 and 37 of the Arbitration Act, the Court relied on Delhi Airport Metro Express (P) Ltd. v. DMRC and Indian Oil Corporation Ltd. v. Shree Ganesh Petroleum.

These precedents establish that the Arbitral Tribunal is the final authority on facts and law; Courts cannot interfere with a "possible interpretation" of a contract unless it is patently unreasonable, perverse, or ignores vital evidence.

Regarding the delay, the Court found the Appellant’s explanation (busy schedule and travel) failed to constitute "sufficient cause," noting that in commercial disputes, the expression is not elastic enough to cover negligence or inaction.

On the merits, the Court examined Clause (l) of the SPA, which provided the exit option "at the end of the period of 5 years," and Clause (m), which limited the agreement's validity to five years.

The Court noted the Appellant’s own admission that the SPA was never renewed or modified by an addendum.

The Court reasoned that the Arbitrator’s interpretation—that the option had to be exercised strictly at the end of the stipulated period—was a plausible and "possible view" based on the contract's language and the parties' evidence.

Since the Court does not sit in appeal over the merits of an award, it held that there was no ground to substitute the Arbitrator’s interpretation with its own.

The Court held that the Appellant failed to show sufficient cause for the 85-day delay, as the explanation provided was generic and lacked bona fides.

Furthermore, the Court upheld the Commercial Court's refusal to set aside the award, ruling that the Arbitrator’s interpretation of the SPA was neither patently illegal nor perverse.

I.A. No. 1/2023 for condonation of delay was dismissed.