Synopsis

The petitioner (NHIDCL) challenged an arbitral award dated 2nd January 2023 which held that the suspension of the respondent (consultant) from a supervision contract for a tunnel project in Jammu & Kashmir was illegal. The arbitrator awarded Rs.5.44 crore for the suspension period, interest on delayed payments, and litigation costs. The petitioner argued that the suspension was bona fide due to alleged fraudulent practices in bidding, and that the award was non‑speaking and based on insufficient evidence. The Delhi High Court dismissed the Section 34 petition, holding that: (i) the suspension and show cause notice lost relevance after the petitioner voluntarily revoked the suspension and allowed the respondent to continue work; (ii) the arbitral award contains implied reasons which satisfy Section 31(3); (iii) the quantum of evidence and its appreciation fall within the arbitrator’s domain; and (iv) no perversity or patent illegality was made out.

Court: High Court of Delhi

Coram: Honourable Mr. Justice Avneesh Jhingan

Date of Judgment: 20th April 2026

Citation: O.M.P. (COMM) 173/2023 (2026:DHC:3253)

Core Law: Arbitration and Conciliation Act, 1996 – Section 34 (setting aside arbitral award), Section 31(3) (requirement of reasoned award)

2. Legal Framework

Major laws and provisions involved

• Arbitration and Conciliation Act, 1996 – Section 34 (petition for setting aside award); Section 31(3) (requirement of reasoned award); Section 31A(3) (discretion to award costs)

Key legal principles applied

Scope of interference under Section 34: The court does not sit in appeal over an arbitral award. The award can be set aside only if it is perverse, patently illegal, or against public policy. A plausible view taken by the arbitrator, even if another view is possible, cannot be interfered with.

Reasoned award under Section 31(3): The mandate is to have reasoning that is intelligible and adequate. Reasons can be implied from a fair reading of the award and the documents referred to thereunder. An elaborate judgment is not required.

Quantum of evidence: The determination of the quantum of evidence required to accept a claim falls within the exclusive domain of the arbitrator. If there is some evidence, the court cannot re‑appreciate it. Only if there is no evidence at all can the award be invalidated.

Interpretation of contract terms: The interpretation of contractual provisions by the arbitral tribunal is binding unless it is patently unreasonable or perverse.

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