Section 37 jurisdiction precludes re-evaluating evidence or substituting an arbitrator’s plausible interpretation of contractual terms.

The dispute arose from a 2008 work order for the construction of a university guest house.

Due to a lack of funds, the University failed to clear bills, causing the respondent to stop work.

A dispute emerged regarding a balance of ₹2,26,617 from the 14th running bill, which the respondent accepted under protest.

Arbitration was invoked in 2015, and a sole arbitrator was appointed by the High Court in 2019.

The Arbitrator ruled in favor of the respondent on 31.12.2021.

The Appellants challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996 (“1996 Act”), but the Commercial Court, Jodhpur, dismissed the petition on 06.11.2024.

The Appellants subsequently filed this appeal under Section 37 of the 1996 Act.

1. Whether the arbitral claims were barred by limitation given the cause of action arose in 2012 while arbitration was invoked in 2015.

2. Whether the Arbitrator exceeded his jurisdiction or committed patent illegality by misinterpreting Clause 6 of the agreement regarding the finality of measurements.

3. Whether the scope of interference under Section 37 of the 1996 Act permits the appellate court to re-appreciate evidence or substitute the Arbitrator’s interpretation of the contract.

Sections 34 and 37 of the Arbitration and Conciliation Act, 1996, which limit judicial interference to grounds of patent illegality, perversity, or conflict with public policy.

Section 28(3) of the Act, requiring the Arbitrator to decide in accordance with the terms of the contract.

The precedent in BSNL and Anr. v. Nortel Networks India Private Limited (2021) regarding the threshold for dismissing claims on the grounds of limitation at the referral stage.

The High Court observed that its jurisdiction under Section 37 is narrower than the already restricted scope of Section 34.

Regarding limitation, the court affirmed the Arbitrator’s finding that because the dispute involved a running account and the final rejection/part-payment occurred as late as January 2013, the 2015 invocation was within the statutory period.

On the interpretation of Clause 6, the court held that the Arbitrator’s construction of contractual terms is final unless it is a view "no reasonable person could take".

The court rejected the plea to re-evaluate claims for idle machinery and rentals, stating that the assessment of evidence and quantification of damages fall squarely within the Arbitrator's fact-finding domain.

The court distinguished Nortel Networks, noting that unlike the "hopelessly barred" claims in that precedent, the current claims involved continuing transactions.

The court affirmed the Commercial Court’s judgment and upheld the Arbitral Award dated 31.12.2021.

All pending applications were disposed of accordingly.