Section 37 appellate review cannot reappreciate evidence or disturb a reasonably possible arbitral finding.

The Appellant, proprietor of a construction firm, was awarded a contract by the Respondent for construction of a Student Centre at the NSIT campus for ₹64,44,290 plus GST. The work was scheduled from 26 February 2016 to 25 August 2016, but was completed on 25 September 2018, resulting in a delay of 761 days.

The Appellant attributed the delay to the Respondent’s failure to provide a hindrance-free site, delayed and revised drawings, trees and an HT cable obstructing construction, incomplete electrical work by another agency, and changes in specifications and scope. The Respondent contended that the initial hindrances were removed within a reasonable period and that the subsequent delay resulted from the Appellant’s failure to deploy adequate manpower and resources.

The Respondent deducted ₹68,542 from the final bill as contractual compensation for delay. The Appellant invoked arbitration and raised claims for refund of the deduction, unpaid work and electricity charges, extra/substituted work, site establishment expenses, head-office expenses, and interest. The Respondent filed a counter-claim of ₹3,10,000.

The Arbitral Tribunal rejected the Appellant’s claims, holding that the delay and contractual breaches were not proved to be attributable to the Respondent and that the Appellant had failed to deploy the requisite technical manpower and resources; the Respondent’s counter-claim was also rejected.

The Commercial Court dismissed the Appellant’s Section 34 challenge, holding that the challenge sought impermissible re-appreciation of evidence. The Appellant then preferred the present appeal under Section 37 of the Arbitration and Conciliation Act, 1996.

Whether the Commercial Court erred in refusing to interfere under Section 34 of the Arbitration and Conciliation Act, 1996 with the Arbitral Award rejecting the Appellant’s claims?

Whether the Arbitral Award was vitiated by patent illegality, perversity, disregard of material evidence, or conflict with the fundamental policy of Indian law so as to justify interference under Sections 34 and 37 of the Act?

Whether the Appellant was entitled to monetary relief on the basis that the Respondent was responsible for the delay in completion of the construction project?

The Court applied Sections 34 and 37 of the Arbitration and Conciliation Act, 1996, read with Section 13 of the Commercial Courts Act, 2015. Section 34 provides a limited, supervisory jurisdiction over arbitral awards, while Section 37 confines appellate scrutiny to examining whether the Section 34 court acted within or exceeded its jurisdiction.

The Court relied on OPG Power Generation Pvt. Ltd. v. Enexio Power Cooling Solution India Pvt. Ltd., 2024 SCC OnLine SC 2600, and Punjab State Civil Supplies Corpn. Ltd. v. Sanman Rice Mills, 2024 SCC OnLine SC 2632, for the principle that courts cannot re-appreciate evidence, reassess factual findings, or substitute their own interpretation merely because another view is possible.

Interference is permissible only where the award is contrary to substantive law, the Act, or the contract, or where its findings are unsupported by evidence, based on irrelevant evidence, ignore material evidence having a direct bearing on the dispute, or are so irrational as to be perverse.

The Court found that the Arbitrator had independently considered the Appellant’s allegations concerning trees, delayed or modified drawings, the HT cable, electrical work by another agency, and changes in specifications.

The Arbitrator concluded from the contemporaneous correspondence and evidence that excavation had commenced despite the trees, the trees were removed shortly thereafter, substantial drawings were supplied at the inception, and subsequent modifications were ordinary execution-stage changes that did not cause material delay.

Although some initial hindrances existed and extensions of time had been granted, the Arbitrator found that those hindrances were removed within a reasonable period and did not explain the prolonged delay of over two years.

The Appellant failed to establish a causal connection between the Respondent’s alleged breaches and the continuing delay.

The Court held that an extension of time or partial attribution of delay to the Respondent did not, by itself, establish liability for consequential monetary claims.

Since the Appellant neither identified the allegedly ignored documents nor demonstrated how their omission affected the award, no perversity, patent illegality, jurisdictional error, or failure to consider a statutory ground was established.

The challenge therefore amounted to an impermissible request for fresh appreciation of evidence under Sections 34 and 37.

It held that the Commercial Court correctly exercised its limited jurisdiction under Section 34 and that the Arbitral Award represented a reasonable view supported by the evidence.

The Appellant failed to establish patent illegality, perversity, conflict with the fundamental policy of Indian law, or any other ground warranting interference under Sections 34 or 37.

The appeal, along with all pending applications, was dismissed as devoid of merit.