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Arbitration — Merits of arbitral award - Interference

Case Reported in 2015 SCC Vol. 3 March 7, 2015 Part 1
None of the grounds contained in S. 34(2)(a) deal with the merits of the decision rendered by an arbitral award, it is only when arbitral award is in conflict with public policy of India as per S. 34(2)(b)(ii), that merits of an arbitral award are to be looked into under certain specified circumstances. Said circumstances include when the award is in conflict with fundamental policy of Indian law, interest of India, justice or morality and patent illegality. When any of the heads/sub-heads of test of “public policy” is applied to an arbitral award, court does not act as court of appeal. Interference is permissible only when findings of arbitrator are arbitrary, capricious or perverse, or when conscience of court is shocked, or when illegality is not trivial but goes to root of the matter, not when merely another view is possible. Furthermore, arbitrator being ultimate master of quantity and quality of evidence while drawing arbitral award, award based on little evidence or on evidence which does not measure up in quality to a trained legal mind cannot be held invalid. Once it is found that arbitrator’s approach is neither arbitrary nor capricious, no interference is called for on facts. (2015) 3 SCC 49
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