Judicial intervention under Section 37 of the Arbitration Act is precluded by arbitrator's factual determination of market value.

The National Highways Authority of India (NHAI) challenged an arbitral award passed under Section 3G(5) of the National Highways Act, 1956

The Arbitrator (District Collector) had re-determined the market value of the acquired land by adopting the highest jantri (government-fixed guideline) value of the village and adding a 5% annual enhancement

NHAI challenged this award before the Commercial Court (6th Additional District Judge, Ahmedabad) under Section 34 of the Arbitration and Conciliation Act, 1996, alleging that the award was unreasoned, arbitrary, and violated principles of natural justice

The Commercial Court dismissed the challenge on December 31, 2025

NHAI then filed the present appeal under Section 37 of the Arbitration Act

1. Whether the Arbitrator committed a patent illegality by applying the highest jantri rate uniformly and adding a 5% annual increase in determining compensation

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 the fundamental policy of Indian law

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 the criteria for assessing market value, including the use of jantri rates

It relied on the precedent NHAI v. Nagraju [(2022) 15 SCC 1], which settled that market value determination must follow the 2013 Act

The court applied the restrictive principles of judicial review under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996, which prohibit the re-appreciation of evidence or interference unless there is patent illegality or a violation of public policy

The High Court observed that factual inquiries regarding market value, conducted under the framework of Section 26 of the 2013 Act, involve an appreciation of material and evidence that cannot be re-examined by a court under Section 34 or 37

The court noted that using jantri rates—which are government-prescribed guideline values—ensures uniformity and transparency, thus negating claims of arbitrariness

Regarding procedural objections, the court found that NHAI had participated in the proceedings without prior objection and that a signed copy of the award was indeed on record

The analysis emphasized that a mere disagreement with the valuation methodology or the quantum of compensation does not constitute "patent illegality" or a shock to the "conscience of the court" required to set aside a statutory arbitral award

The court affirmed the Commercial Court’s decision, ruling that the Arbitrator acted within the statutory framework and that the valuation based on jantri rates was neither illegal nor arbitrary. The judgment and order dated December 31, 2025, were upheld, and all connected applications were disposed of