Whether a court can interfere in an arbitral award on the ground that the tribunal erred in evaluating the evidence led by the parties : Delhi High Court

The Delhi High Court has passed a judgment on 15-04-2021 in the case Megha Enterprises and Ors. Vs M/S Haldiram Snacks Pvt. Ltd. O.M.P. (COMM) 79/2021. Justice Vibhu Bakhru dismissed the petition.


The petitioners have filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter the „A&C Act‟) impugning an arbitral award dated 26.10.2020 rendered by an Arbitral Tribunal constituted by a Sole Arbitrator, Justice (Retd.) Dr Mukundakam Sharma, a former Judge of the Supreme Court of India. The arbitration was conducted under the aegis of Delhi International Arbitration Centre (DIAC) and its Rules.  

Petitioner no.1 (hereinafter „Megha‟) is a partnership firm and petitioner nos. 2 to 5 are its constituent partners. Megha is, inter alia, engaged, in the business of trading Crude Palm Oil (edible grade). The subject disputes arise out of two agreements dated 02.02.2013 and 25.02.2013, which were entered into between Megha and M/s Coral Products Pvt. Ltd. (hereinafter „Coral‟) for sale and purchase of Crude Palm Oil on a High Seas Sale Basis. In terms of the agreement dated 02.02.2013, Coral agreed to sell 1470 MT of Crude Palm Oil of Indonesian origin on board the vessel, MT. Prosperity V.01/13, with Kakinada as the port of delivery, at the rate of ₹46,600/- per MT. In terms of the Agreement dated 25.02.2013, Coral agreed to sell 2500 MT of Crude Palm Oil on board the vessel, MT. Golden Blessing V.1301, with Kakinada as the port of delivery, at the rate of ₹48,750/- per MT.  

In the aforesaid circumstances, Haldiram filed a petition under Section 11(6) of the A&C Act, being ARB.P. 421/2016: Haldiram Snacks Pvt. Ltd. v. Megha Enterprises and Anr., seeking appointment of a Sole Arbitrator to adjudicate the disputes in respect of the two High Sea Sale Agreements in question. The said petition was allowed by this Court and by an order dated 18.04.2017, this Court referred the parties to DIAC with the direction for DIAC to appoint an Arbitrator in accordance with the provisions of the A&C Act and its Rules.


The reasons and conclusions given by the court is that It is apparent from the above that the petitioner‟s case is founded on the assumption that the Arbitral Tribunal has grossly erred in (a) evaluating the evidence led in the case; and (b) misapplying the provisions of Section 18 of the Limitation Act.

The contention that that the Arbitral Tribunal had grossly erred in accepting the said evidence without an affidavit under Section 65B of the Indian Evidence Act, 1872 is difficult to accept. This is because of two reasons. First, in terms of Section 1 of the Indian Evidence Act 1872, the said Act is not applicable to proceedings before the arbitrator. Second, no such objection was taken on behalf of the petitioners at the appropriate stage, that is, before the Learned Arbitrator. 

The Court took reliance from the judgement of Associate Builders v. Delhi Development Authority: (2015) and also from the case of Ssangyong Engineering and Construction Company Ltd. v. National Highway Authority of India (NHAI): (2019) in this case supreme court held as:

“38. Secondly, it is also made clear that reappreciation of evidence, which is what an appellate court is permitted to do, cannot be permitted under the ground of patent illegality appearing on the face of the award.”  

In view of the above, this Court finds no reason to interfere with the impugned award.  The petition is, accordingly, dismissed.

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