Judicial interference under Section 37 is barred where arbitral awards determine land compensation using statutory Jantri rates.

The National Highway Authority of India (NHAI) challenged an arbitral award passed by the District Collector (acting as statutory Arbitrator) under Section 3G(5) of the National Highways Act, 1956.

The Arbitrator had re-determined the market value of the acquired land by applying the highest Jantri rate of the village and adding a 5% annual enhancement.

The NHAI challenged this award before the Commercial Court (6th Additional District Judge, Ahmedabad) under Section 34 of the Arbitration and Conciliation Act, 1996, which dismissed the application on 31.12.2025.

The NHAI subsequently preferred this First Appeal under Section 37 of the 1996 Act.

1. Whether the Arbitrator's methodology of adopting the highest Jantri rate and adding a 5% enhancement constitutes a patent illegality or violation of fundamental policy of Indian law under Section 34 of the Act.

2. Whether the arbitral award was "unreasoned" or violated principles of natural justice due to alleged denial of oral hearing and failure to frame specific issues.

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 mandates Jantri value as a criterion for determining market value.

It relied on the precedent National Highways Authority of India v. Nagraju [(2022) 15 SCC 1] to establish that market value determination follows the 2013 Act.

the court applied the restrictive standards for judicial interference under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996, which prohibit re-appreciation of evidence or acting as an appellate authority.

The Court observed that the Arbitrator conducted a factual inquiry based on material evidence and Section 26 of the 2013 Act to determine compensation.

It held that the use of Jantri rates—government-fixed guideline values—ensures transparency and cannot be termed arbitrary or illegal.

The Court highlighed that the scope of Section 34 is extremely narrow; a mere disagreement with the valuation methodology or the amount of compensation does not satisfy the "patent illegality" or "shocks the conscience" threshold.

It found that the NHAI had participated in the proceedings without prior objection and failed to show any violation of the "fundamental policy of Indian law".

The Court further noted that once a signed award is on record, procedural objections regarding non-signing or limitation lose force.

The Court affirmed that valuation and quantification fall within the exclusive domain of the Arbitrator and cannot be re-examined through a re-appreciation of evidence under Section 37.

The judgment and order dated 31.12.2025 were upheld, and all connected civil applications were disposed of.