Delhi HC Sends Contractor’s Challenge to DMRC Arbitration Award Back for Fresh Decision After Single Judge Failed to Address Specific Objections

DMRC terminated a construction contract with C.P. & Associates after disputes arose over delay, work fronts, drawings, measurements and the final bill.

The arbitral tribunal allowed or partly allowed some claims but rejected others; the appellant’s Section 34 petition was dismissed by a Single Judge, who recited the parties’ contentions and the award’s findings but did not specifically address the appellant’s objections.

The appellant challenged that dismissal under Section 37 of the Arbitration and Conciliation Act, 1996.

Sections 34 and 37 of the Arbitration and Conciliation Act, 1996 require limited judicial intervention in arbitral awards, and a Section 34 court may set aside an award only on the statutory grounds; nevertheless, it must apply its mind to the specific objections raised.

NHAI v. M. Hakeem, (2021) 9 SCC 1, and Fiza Developers & Inter-Trade (P) Ltd. v. Amci (India) (P) Ltd., (2009) 17 SCC 796, affirm the restricted scope and statutory nature of Section 34 review.

Under HUDA v. Mehta Construction Co., (2022) 5 SCC 432, objections cannot be disposed of through cryptic or generalised reasoning that fails to address specific contentions.

Bombay Slum Redevelopment Corpn. (P) Ltd. v. Samir Narain Bhojwani, (2024) 7 SCC 218, recognises that remand under Section 37 may be warranted in exceptional cases, including summary disposal of a Section 34 petition without consideration of its merits.

The Single Judge had set out the facts, submissions and relevant portions of the award, but did not determine the appellant’s specific claim-wise objections; instead, the objections were rejected generally on the basis that the award accorded with the contract.

The appellate court held that this omission prevented it from examining whether the Section 34 decision fell within the statutory limits, and deciding the objections for the first time on appeal would deprive the parties of a statutory stage of review.

The failure to consider the objections therefore warranted remand rather than appellate determination of their merits.

The Court set aside the Single Judge’s order and remitted the matter for fresh consideration of the appellant’s objections under Section 34 of the Act.