The Arbitration and Conciliation Act, 1996 was enacted to ensure swift resolution of commercial controversies with minimal judicial interference. Section 34 sets out narrow, exhaustive grounds upon which an arbitral award may be set aside. Recent rulings by the Supreme Court of India in Delhi Airport Metro Express Pvt. Ltd. v. DMRC (2022) and Ssangyong Engineering & Construction Co. Ltd. (2019) have reiterated that courts exercising jurisdiction under Section 34 do not sit as courts of appeal.
The Scope of “Patent Illegality”
Under Section 34(2A), an arbitral award arising out of an arbitration other than an international commercial arbitration may be set aside if the court finds that the award is vitiated by patent illegality appearing on the face of the award. However, the proviso expressly clarifies that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.
A finding of patent illegality must go to the root of the matter. Arbitrators are the ultimate masters of the quantity and quality of evidence. So long as the arbitrator’s interpretation of a contract is plausible, courts cannot substitute their view for that of the arbitral tribunal.
