High Court cannot re-examine arbitral land compensation awards by reappreciating evidence under Section 37.

The National Highway Authority of India (NHAI) challenged an arbitral award passed under Section 3G(5) of the National Highways Act, 1956, concerning compensation for land acquisition

The Arbitrator (District Collector) had re-determined the market value by adopting the highest Jantri rate for the village and adding a 5% annual increase

NHAI filed an application under Section 34 of the Arbitration and Conciliation Act, 1996, before the Commercial Court (6th Additional District Judge, Ahmedabad), arguing that the award was unreasoned, ignored NHAI's evidence, and violated principles of natural justice

The Commercial Court dismissed the application on December 31, 2025

Consequently, NHAI filed this First Appeal under Section 37 of the 1996 Act before the Gujarat High Court

1. Whether the Arbitrator committed a patent illegality by applying the highest Jantri rate and a 5% annual enhancement for determining market value

2. Whether the arbitral award was liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996, for being unreasoned or in violation of fundamental policy of Indian law

3. Whether the High Court can re-appreciate evidence in an appeal under Section 37 of the Arbitration and Conciliation Act, 1996

The Court applied Section 3G(7) of the National Highways Act, 1956, and Section 26 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which provides criteria for determining market value, including Jantri values

It relied on the precedent National Highways Authority of India v. Nagraju [(2022) 15 SCC 1], establishing that market value must be determined per the 2013 Act

The court further applied Sections 34 and 37 of the Arbitration and Conciliation Act, 1996, which severely restrict the scope of judicial interference to grounds of patent illegality or conflict with public policy, prohibiting the re-appreciation of evidence

The High Court observed that the Arbitrator acted within the statutory framework of Section 26 of the 2013 Act by using Jantri rates, which ensures uniformity and transparency in valuation

The Court held that the appellant’s grievances regarding the methodology of valuation and the alleged failure to consider specific evidence amounted to a request for a factual re-examination

Under Section 34, a court cannot act as an appellate body; it can only intervene if an award shocks the conscience or contains a patent illegality apparent on its face

Since the Arbitrator determined compensation based on government-fixed Jantri rates, the methodology was neither arbitrary nor illegal

The Court noted that the Commercial Court rightly found the award to be within the statutory domain of the Arbitrator and that the powers of the High Court under Section 37 are "all the more circumscribed" compared to Section 34

The Court answered that the factual inquiry made by the Arbitrator cannot be re-examined by reappreciating evidence under Section 37 of the 1996 Act

The judgment of the Commercial Court dated December 31, 2025, was upheld