Section 37 courts cannot reappreciate evidence absent patent illegality or perversity in the arbitral award.

ESI Corporation and MS Design Associates entered into two contracts for architectural and engineering consultancy services relating to the ESIC Hospital at Andheri, Mumbai: Contract No. I dated 29 May 2008 concerned facelifting, modernisation, extension and upgradation of the hospital, while Contract No. II dated 12 November 2010 concerned construction of the Post-Graduate Hostel/Nursing College.

Disputes arose regarding prolongation of the project, changes in the scope of work and payments claimed by MS Design Associates.

In arbitration, Claims A and B, concerning outstanding payments and additional works/services, were allowed; Claim C for interest was partly allowed; Claims D and E were rejected; and Claim F for litigation costs was allowed.

ESI Corporation’s challenge under Section 34 of the Arbitration and Conciliation Act, 1996 was dismissed by the learned Single Judge on 16 January 2026.

The present appeal was filed under Section 37 of the Act against that decision.

1. Whether the findings in paragraphs 204 and 205 of the arbitral award were contradictory and so perverse or patently illegal as to warrant interference under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996.

2. Whether the Arbitrator failed to consider relevant documentary evidence, thereby justifying interference with the award under Sections 34 and 37 of the Act.

3. Whether the learned Single Judge erred in refusing to set aside the arbitral award.

The Court applied the restricted scope of judicial review under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996.

An appellate court hearing a Section 37 appeal cannot exercise wider powers than those available to a court under Section 34 and cannot independently reassess the merits of the arbitral award ( MMTC Ltd. v. Vedanta Ltd. , (2019) 4 SCC 163).

Review under Section 34 is narrow, and the jurisdiction under Section 37 is even more circumscribed; courts cannot reappreciate evidence or substitute their interpretation for that of the Arbitral Tribunal ( UHL Power Co. Ltd. v. State of Himachal Pradesh , (2022) 4 SCC 116).

Interference is permissible only where the award or the Section 34 decision discloses grounds such as patent illegality, perversity, or failure to exercise jurisdiction vested by law.

The Court held that paragraphs 204 and 205 of the award were not contradictory when read in context.

The deletion of one basement reduced the construction cost, but the consequent revision of the plan required fresh designs and drawings.

Since MS Design Associates provided architectural and engineering consultancy services rather than construction services, the revised scope involved additional professional work for which compensation could be awarded.

The finding that additional work had been performed was therefore neither perverse nor patently illegal.

The objection regarding ignored documents also failed because ESI Corporation did not identify any specific material document relevant to the claims that had been disregarded.

The general assertion that all documentary evidence had not been considered amounted to an impermissible request for reappreciation of evidence, particularly at the Section 37 stage.

It found no contradiction, perversity or patent illegality in the Arbitrator’s findings and no failure by the Arbitrator to consider relevant evidence.

The learned Single Judge had correctly declined to interfere with the award under Section 34, and no ground for appellate interference under Section 37 was established.

The appeal was dismissed, and any pending application was also disposed of.