Section 37 jurisdiction precludes interference with an Arbitral Tribunal’s plausible interpretation of contractual clauses.

The Appellant awarded a contract for the "Heater package for the DHDT project" to the Respondent on 16.08.2007, with a scheduled completion period of 13 months.

The work was completed on 10.08.2011, following a delay of 1059 days.

The Respondent submitted its final running account (RA) bill on 19.04.2012.

On 20.08.2014—more than two years after the final bill submission—the Appellant granted a post-facto extension of time but imposed Liquidated Damages (LD) of 10% of the contract value (Rs. 2,59,57,700/-).

The Respondent initiated arbitration, where the Arbitral Tribunal (AT) ordered the refund of the LD amount and payment of the RA bill, while rejecting other claims as "non-notified".

The District Judge, Chirang, dismissed the challenge on 26.02.2019.

1. Whether the dispute regarding the deduction of Liquidated Damages (LD) was a "non-arbitrable" dispute because it was not "notified" by the contractor in accordance with Clause 6.6.1.0 and 9.1.0.0 of the General Conditions of Contract (GCC).

2. Whether the Arbitral Tribunal and the Section 34 Court erred in interpreting the contract to allow jurisdiction over a claim that was not included in the final bill.

3. Whether the scope of appellate interference under Section 37 permits the Court to substitute its own interpretation of contract clauses for a "plausible" view taken by the Arbitral Tribunal.

Sections 34 and 37 of the Arbitration and Conciliation Act, 1996, which limit judicial interference in arbitral awards to specific grounds like patent illegality or perversity.

Clause 6.6.1.0 (requirement for written notice of claims within 10 days) and Clause 9.1.0.0 (referability of notified claims and owner-made deductions to arbitration) of the General Conditions of Contract (GCC).

The court relied on the precedent in UHL Power Company Limited v. State of Himachal Pradesh (2022) and Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd. (2019), which establish that courts must defer to an Arbitral Tribunal’s interpretation of a contract if it is a plausible view, even if an alternative interpretation exists.

The Appellant contended that under Clause 9.1.0.0, only "notified claims" included in the final bill are referable to arbitration; since the LD challenge was not notified within 10 days of the occurrence, the AT lacked jurisdiction.

The Court rejected this, observing that the Appellant only decided to impose LD in 2014, roughly 2.5 years after the Respondent had submitted its final RA bill in 2012.

Consequently, it was factually impossible for the Respondent to notify or include the LD dispute in the final bill.

The Court further analyzed Clause 9.1.0.0, noting it contains two distinct parts: the first regarding "notified claims" of the contractor, and the second regarding disputes arising out of amounts "deducted from the final bill" by the Owner.

The Court held that the LD deduction fell under the second part, which does not carry the same notification rigors as the first.

Given the restrictive scope of Section 37, the Court found the Tribunal’s interpretation to be "possible and plausible" and not "unpardonably perverse".

The Court held that the Arbitral Tribunal had proper jurisdiction to adjudicate the LD refund because the deduction occurred long after the final bill was submitted, exempting it from the standard notification requirements of Clause 6.6.1.0.

The court vacated the stay on the execution of the lower court's order and declared the Respondent entitled to pendente lite interest as per the original arbitral award.