10 June 2024


High Court of Delhi

General Manager Northern Railway vs. Pioneer Publicity Pvt. Ltd. And Anr.




Erroneous application of law cannot be categorised as patent illegality

Appellant by way of present Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) impugns judgment, whereby the objections filed by the Appellant under Section 34 of the Arbitration Act against the Interim Award have been dismissed. The Appellants submits that, the award suffers from patent illegality manifested on the face of the award itself is not sustainable.

Learned Single Judge has held that, in respect of locations/sites, which were being operated by contractors with whom pre-existing contracts were still continuing, the right of Respondent would emerge only after the said contracts came to an end but that did not derogate, from the obligation, of the Appellant, to provide, during the entire term of the contract, 213417 sq. ft. of advertising area.

The Arbitral Tribunal is the master of the factual arena and even if it goes wrong while deciding the factual issues, unless there is something manifest from the face of the award that is so grave as to move the conscience of the court that the error would result in a monumental miscarriage of justice, no interference by the court is called for.

The Supreme Court of India in Delhi Airport Metro Express (P) Ltd. v. DMRC, held that Patent illegality should be illegality which goes to the root of the matter. Every error of law committed by the Arbitral Tribunal would not fall within the expression "patent illegality". Likewise, erroneous application of law cannot be categorised as patent illegality. In Jhang Cooperative Group Housing Society v. P.T Munshi Ram & Associates Private limited, it is observed that, contravention of law not linked to public policy or public interest is beyond the scope of the expression "patent illegality". What is prohibited is for Courts to reappreciate evidence to conclude that the award suffers from patent illegality appearing on the face of the award, as Courts do not sit in appeal against the arbitral award.

The award does not suffer from any illegality leave alone a patent illegality that goes to the root of the matter. The view taken by the Arbitrator is a reasonable and plausible one. Learned Single Judge has examined the award in detail and after scrutinizing the same has found the findings and reasoning to be justified and has declined to interfere in the findings arrived at by the learned Arbitrator. The findings of the Arbitrator are reasonable and justified in the facts of the present case. There is no infirmity in the Impugned award of the Arbitrator or the Judgment of the learned single judge rejecting the objections of the Appellant under Section 34 of the Arbitration Act. Appeal dismissed.

Tags : Objections Award Patent illegality

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