Mr. Vikram Nankani, Sr. Adv. with Mr. Karan Bharihoke, Mr. Anirudh Bakhru, Ms. Devika v. NATIONAL HIGHWAYS AUTHORITY OF INDIA

Judgment

1. Under challenge at the instance of IRB Ahmedabad Super Expressway1, in the present petition preferred under Section 34 of the Arbitration & Conciliation Act, 19962 is an arbitral award passed by a learned three-member Arbitral Tribunal on 7 April 2024. IRB was the 1 “IRB” hereinafter 2 “the 1996 Act” hereinafter O.M.P. (COMM) 261/2024 Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:11.02.2025 17:50:46 Signature Not Verified Digitally Signed By:CHANDRASHEKHARAN HARI SHANKAR Signing Date:11.02.2025 17:44:38 claimant in the arbitral proceedings, and the National Highways Authority of India3 was the respondent and counter-claimant.

2. The challenge, in this petition, is restricted to the rejection, by the Arbitral Tribunal, of the claim of IRB for compensation, from NHAI, under Article 35.4 of the Concession Agreement4, dated 25 July 2011, executed between them.

3. To clear the air and not for anything else, I may note, here, that the CA envisaged payment of premium by IRB to NHAI. The Government had announced a Premium Deferment Scheme, whereunder part of the premium could be paid by Concessionaires (such as IRB) upfront, and the remainder deferred for payment later. NHAI raised a counter-claim, in the arbitral proceedings, against IRB, claiming payment of the deferred premium. The Arbitral Tribunal has held NHAI to be entitled to the said payment. IRB has, candidly, conceded that it is not challenging that part of the award, though the parties have joined issue, in other cognate proceedings, on the issue of whether the deferred payment is to be paid by IRB upfront, following the impugned Arbitral Award, or at a later point of time.

4. That controversy is, however, foreign to the present petition, which is restricted to IRB’s claim against NHAI for compensation in terms of Article 35.4 of the CA, and the sustainability of the decision of the Arbitral Tribunal to reject the said claim. I have deemed it appropriate to mention this only because the impugned Award, which 3 NHAI 4 “CA” hereinafter O.M.P. (COMM) 261/2024 Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:11.02.2025 17:50:46 Signature Not Verified Digitally Signed By:CHANDRASHEKHARAN HARI SHANKAR Signing Date:11.02.2025 17:44:38 is lengthy deals at times with IRB’s claim against NHAI and at others with NHAI’s counter-claim against IRB, and there is chance of confusion.

5. To repeat for the third time, this petition is concerned only with the decision of the Arbitral Tribunal on IRB’s claim, against NHAI, for compensation in terms of Article 35.4 of the CA.

6. Needless to say, even if this Court were to agree with IRB, that the Arbitral Tribunal was not justified in rejecting IRB’s claim, for the reasons contained in the impugned award, this Court would have to stop at that. It cannot adjudicate on the claims on merits, as that would amount to modifying the impugned arbitral award, which the law proscribes. The power with the Court is only to uphold the award, or set aside the award, or, in the very limited circumstances envisaged by Section 34(4), adjourn the matter to enable the Arbitral Tribunal to take steps, as it may choose, to remove any removable defect in the Award, so as to avoid the Award being set aside on that ground5. Exercise of Section 34(4) jurisdiction can, however, only be on application ad invitum, and not suo motu.

7. It is nobody’s case that Section 34(4) applies. Facts

8. Under the CA, which was executed between IRB and NHAI on 5 NHAI v M. Hakeem, (2021) 9 SCC 1 O.M.P. (COMM) 261/2024 Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:11.02.2025 17:50:46 Signature Not Verified Digitally Signed By:CHANDRASHEKHARAN HARI SHANKAR Signing Date:11.02.2025 17:44:38 25 July 2011, IRB was to develop, maintain and manage, by six laning, a stretch of NH-86 between km 6.4 and km 108.7, and improve the existing Ahmedabad Vadodara Expressway from km 0.00 to km

93.302. The agreement was on Design, Build, Finance, Operate and Transfer basis, as per which, on completion of the construction of the Project Highway as per the CA, IRB could commence collecting toll from the users of the Highway.

9. In accordance therewith, consequent on completion of construction as per the contracted schedule, IRB commenced collecting toll, from the Project Highway, on 6 December 2015.

10. Under the CA, IRB, acquired exclusive license to operate and maintain the Project Highway for 25 years from the Appointed Date, which was 1 January 2013. All costs and expenses, towards operating and maintaining the Project Highway were to be borne by IRB. IRB was entitled to demand, collect and appropriate toll from vehicles plying on the Project Highway.

11. Article 6.3 of the CA proscribed the emergence of any “Competing Road”, as it would have adverse effect on the volume of traffic and the toll collections on the Project Highway. It read thus: “6.3 Obligations relating to Competing Roads The Authority shall procure that during the subsistence of this the Authority nor any Government Agreement, neither Instrumentality shall, at any the 10th (tenth) anniversary of the Appointed Date, construct or cause to be time before 6 “the Project Highway” hereinafter O.M.P. (COMM) 261/2024 Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:11.02.2025 17:50:46 Signature Not Verified Digitally Signed By:CHANDRASHEKHARAN HARI SHANKAR Signing Date:11.02.2025 17:44:38 constructed any Competing Road; provided that the restriction herein shall not apply if the average traffic on the Project Highway in any year exceeds 90% (ninety percent) of its designed capacity specified in Clause 29.2.3. Upon breach of its obligations hereunder, to payment of compensation to the Concessionaire under and in accordance with Clause 35.4.” the Authority shall be liable

12. “Competing Road”, was defined, in the CA, thus: “Competing Road” means a road connecting the two end points of the Project Highway and serving as an alternative route thereof, such road being an existing paved road, which has been widened by more than 2 (two) metres of paved road for at least 75% (seventy five per cent) of the total length thereof at any time after the date of this Agreement, or a new road, which is constructed after such date, as the case may be, but does not include any road connecting the aforesaid two points if the length of such road exceeds the length of the Project Highway by 20% (twenty per cent) thereof.”

13. Thus, a “competing road” was a road (i) which connected the two ends of the Project Highway, (ii) which served as an alternative route to the Project Highway, and (iii) which was (a) either an existing paved road, widened by more than 2 m for at least 75% of its length, after 25 July 2011, (b) a new road, constructed after 25 July 2011. The definition excluded any road connecting the two ends of the Project Highway, if the length of the road exceeded the length of the Project Highway by 20%. As the recital hereinafter would disclose, the Arbitral Tribunal has proceeded on the premise that the Savli road – up and down which the dispute in this case has, in a sense, travelled O.M.P. (COMM) 261/2024 Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:11.02.2025 17:50:46 Signature Not Verified Digitally Signed By:CHANDRASHEKHARAN HARI SHANKAR Signing Date:11.02.2025 17:44:38 – was, in fact, a “competing road” as defined in the CA.

14. Breach, by NHAI, of the obligation cast by Article 6.3 resulted in IRB being entitled to compensation in terms of Article 35.4 of the CA, which read: “In the event that an Additional Tollway or a Competing Road, as the case may be, is opened to traffic in breach of this Agreement, the Authority shall pay to the Concessionaire, for each day of breach, compensation in a sum equal to the difference between the average daily Realisable Fee and the projected daily Fee (the "Projected Fee") until the breach is cured. The Projected Fee hereunder shall be an amount equal to the Average Daily Fee, increased at the close of every month by 0.5% (zero point five per cent) thereof and revised in accordance with Article 27.2. For the avoidance of doubt, the Average Daily Fee for the purposes of this Article shall be the amount so determined in respect of the Accounting Year or period, as the case may be, occurring prior to such opening or operation of an Additional Tollway or a Competing Road, as the case may be.”

15. Towards compliance with its obligations under the CA, NHAI entered into a State Support Agreement7 with the State of Gujarat on 11 February 2016. In furtherance of the CA, an Escrow Agreement was also executed among IRB, NHAI, Infrastructure Development Finance Company Ltd.8 and the Punjab National Bank9 on 10 February 2012. The CA and the Escrow Agreement envisaged resolution of disputes by arbitration.

16. The Court is, therefore concerned, in this petition, with the issue of whether the decision of the Arbitral Tribunal, qua IRB’s claims, 7 “SSA” hereinafter 8 “IDFCL” hereinafter 9 “PNB” hereinafter O.M.P. (COMM) 261/2024 Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:11.02.2025 17:50:46 Signature Not Verified Digitally Signed By:CHANDRASHEKHARAN HARI SHANKAR Signing Date:11.02.2025 17:44:38 can sustain the scrutiny of Section 34 of the 1996 Act.

The impugned Award, to extent it is challenged herein

17. IRB contended it had completed construction and development of the Project Highway within the contractually stipulated period and commenced toll collection from 6 December

2015. However, the Savli road, which was a toll free State Highway constructed by the State of Gujarat, 119 km in length and connecting Vadodara to Ahmedabad, constituted a “Competing Road” as defined in the CA. The existence of this Competing Road resulted in adverse impact on the toll collections on the Project Highway, thereby entitling IRB to compensation in terms of Article 35.4 of the CA. A claim to this effect was, therefore, raised by IRB on NHAI vide letter dated 24 May 2017, reiterated in a subsequent communication dated 22 September 2017.

18. As already noted, the Arbitral Tribunal has ultimately rejected the claim of the IRB for compensation in terms of Article 35.4 of the CA, on account of the Savli Road having become a Competing Road.

19. What falls for consideration is, therefore, whether this rejection is sustainable in law.

20. For this purpose, it is necessary to reproduce, in full, paras 12 (i) to 12 (xiv) of the impugned award, thus: “12(i) Issues No. (i) to (ix) flow from each other sequentially and O.M.P. (COMM) 261/2024 Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:11.02.2025 17:50:46 Signature Not Verified Digitally Signed By:CHANDRASHEKHARAN HARI SHANKAR Signing Date:11.02.2025 17:44:38 thus the Tribunal decides the basic issue which sings the signature tune underlying the nine issues. To make the issue short and crisp, the Tribunal notes that in its Interim Award dated 14.10.2021, the Tribunal has, in para 104 thereof, recorded: hence the broad end points of the Project Highway would be Vadodara and Ahmedabad. In para 106 the Tribunal has recorded that: the length of Project Highway is not to be derived. It is contained in the definition of Project Highway, and provides for the NH-8 Section length as 102.30 Km and the Expressway Section as 93.302 Km. This is in recital B of the Concession Agreement dated 25.07.2011. While deciding preliminary Issue A, the sub-issue whether the ‘end points’ of Savli Road are required to coincide with the ‘end points’ of the Project Highway for the Savli Road to qualify as a ‘Competing Road’, subject to further conditions laid under the definition of a Competing Road, the Tribunal had held in para 104 of the Interim Award as under: “104. Hence the broad end points of the Project Highway would be Vadodara and Ahmedabad. It follows, that if there be an alternative toll-free route offered as a choice to any vehicle owner, which also similarly provides a connection between the city of the Ahmedabad and Vadodara, he would opt for such a route. In such case, such alternative toll-free route would 'compete' with the NH-8 Section. The Savli Road provides a connection between the cities of Vadodara and Ahmedabad, is a toll free (and hence commercially more attractive option for any vehicle user), becomes an alternative choice and thus become a 'Competing Road' for all intents and purposes, to the extent of this parameter. The Claimant is correct in contending that merely because the 'Competing Road' terminates at a point earlier then or other than the exact termination point of the Project Highway, would be immaterial and does not take away from the fact that by using such 'Competing Road' a user can reach the same destination as the Project Highway' and thus such 'Competing Road' connects the end points of the 'Project Highway' i.e. Ahmedabad and Vadodara. This is the essence of the end point criteria mentioned in the definition of 'Competing Road'.” 12(ii) The Claimant had argued that the end points of Savli Road would be Vadodara (Dhumad Chowkdi) to Ahmedabad (Hathijan) and the length is 119 Km and the Tribunal proceeds on the basis that this would be the length of the Savli Road. The Tribunal further proceeds treating as correct the evidence led by the Claimant, which comprises letters obtained by the Claimant from the Public Works Department, State of Gujarat (Road & Bridges O.M.P. (COMM) 261/2024 Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:11.02.2025 17:50:46 Signature Not Verified Digitally Signed By:CHANDRASHEKHARAN HARI SHANKAR Signing Date:11.02.2025 17:44:38 Department), without juxtaposing the rival evidence led by the Respondent which dents the correctness of the information conveyed to the Claimant by the Public Works Department. The Tribunal is also not venturing into the debate between learned counsel for the parties as to whose evidence had a better quality nor the argument of Learned Senior Counsel for the Claimant that since the information obtained and filed before the Tribunal by the Respondent was after the Claimant had led evidence the possibility of the information provided by the Public Works Department was tainted or contrived for the reason the State of Gujarat which had signed the State Support Agreement would have been fastened with the liability should the claim of Savli Road being a Competing Road succeed. In the written submissions filed by the Claimant at the opening arguments, in para 39, the Claimant has tabulated the widening details of Savli Road as emerging from the documentary evidence filed by the Claimant. The table reads as under10: ***** 12(iii) Clarifying once again that without venturing into the correctness of the information provided to the Claimant by the Public Works Department of the State of Gujarat and the Tribunal is treating the said data compilation to be correct, relevant would it to highlight that as per the table out of a total length of 119 Km of Savli Road, 92.310 Km length has been widened and the percentage of widening is 77.56%. 12(iv) The case of the Claimant is that the Project Highway was opened for tolling on 06.12.2015. The data compiled by the Claimant in the table reproduced by the Tribunal in para 12(ii) above shows that the widening of all the sections, except Ode- Umreth (length being 6.20 Km) which commenced on 17.01.2014 and was completed on 16.01.2016, commenced after 06.12.2015 and obviously was completed after 06.12.2015. Thus, treating the data compiled by the Claimant to be correct, it stands out that only widening to the extent of 5.21% of Savli Road commenced before the Project Highway was opened to toll and even this segment was ultimately widened on 16.01.2016 i.e. a little over one month after the Project Highway was opened for tolling. 12(v) The argument of Learned Senior Counsel for the Claimant was premised on the definition of the word ‘construction’ in Article 1.2.1(f) of the Concession Agreement and the mandate in Article 1.2.4 that words or expressions used in the Agreement shall, unless otherwise defined, bear their ordinary English 10 The Table is annexed to this judgment as Annexure A O.M.P. (COMM) 261/2024 Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:11.02.2025 17:50:46 Signature Not Verified Digitally Signed By:CHANDRASHEKHARAN HARI SHANKAR Signing Date:11.02.2025 17:44:38 meaning. Thus, as per Learned Senior Counsel the word ‘serving’ and the word ‘alternative’ finding a mention in the definition of Competing Road must be accorded their ordinary English meaning. 12(vi) The Concession Agreement, vide Article 1.2.1(f) defines the words ‘Construction’ or ‘Building’ to include, unless the context otherwise requires, investigation, design, developing, engineering, procurement, delivery, transportation, installation, processing, fabrication, testing, commissioning and other activity incidental to the construction. 12(vii) Article 6.3 casts Obligations relating to Competing Roads, in the following terms: The Authority shall procure that during the subsistence of this Agreement, neither the Authority nor any Government Instrumentality shall, at any time before the 10th (tenth) anniversary of the Appointed Date, construct or cause to be constructed any Competing Road; provided that the restriction herein shall not apply if the average traffic on the Project Highway in any year exceeds 90% (ninety percent) of its designed capacity specified in Article 29.2.3. Upon breach of its obligations to payment of hereunder, compensation to the Concessionaire under and in accordance with Article 35.4. the Authority shall be liable 12(viii) Article 48.1 of the Concession Agreement defines Competing Road as follows: “Competing Road” means a road connecting the two end points of the Project Highway and serving as an alternative route thereof, such road being an existing paved road, which has been widened by more than 2 (two) metres of paved road for at least 75% (seventy five per cent) of the total length thereof at any time after the date of this Agreement, or a new road, which is constructed after such date, as the case may be, but does not include any road connecting the aforesaid two points if the length of such road exceeds the length of the Project Highway by 20% (twenty per cent) thereof. 12(ix) The phrase: ‘Serving as an alternative route’, or even ‘alternative route’ and ‘serving’ have not been defined in the Concession Agreement and therefore as per Learned Senior Counsel for the Claimant the ordinary English meaning of the words ‘alternative’ and ‘serving’ have to be adopted. Learned Senior Counsel submitted that the word ‘alternative’ is defined in the Oxford Advanced Learner’s Dictionary to mean: ‘a thing that you can choose to do or have out of two or more possibilities.’ The Collins Dictionary defines the word to mean (i) ‘If one thing is an alternative to another, the first can be found, used, or done instead of the second, (ii) An alternative plan or offer is different from the one that you already have, and can be done or used instead.’ O.M.P. (COMM) 261/2024 Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:11.02.2025 17:50:46 Signature Not Verified Digitally Signed By:CHANDRASHEKHARAN HARI SHANKAR Signing Date:11.02.2025 17:44:38 Merriam Webstar Dictionary defines the word to mean: ‘Offering or expressing a choice’. The word ‘serving’ is defined in the Oxford Advanced Learner’s Dictionary to mean: to provide an area or a group of people with a product or service serve somebody/something’. The Collins Dictionary defines it to mean: If something serves people or an area, it provides them with something that they need. The Merriam Webstar Dictionary defines it to mean: ‘to be of use’. Learned Senior Counsel for the Claimant had additionally submitted that it would be impermissible to add the phrase ‘resulting in a diversion of traffic’ in the definition of the Competing Road. 12(x) Even if the argument of Learned Senior Counsel for the Claimant is accepted and the principle of interpretation of contracts being that where a word has both an ordinary meaning as well a specialized meaning, no evidence will be admitted of the specialized meaning, unless it is first proved that parties intended to use the word/phrase in the latter sense as per the opinion in the decision reported as Holt & Co. v Collyer11 and the decision reported as Briggin Hill Airport Ltd. v Bromley12, is accepted and adopting the wide meaning of the word ‘Construct’ to include investigation, design, developing, engineering, procurement, delivery, fabrication, testing, commissioning and other activity incidental to the construction, would only mean that the moment a design is made or the moment developing activity commences on an existing paved road, of widening the same by more than 2 meters and ultimately resulting in at least 75% of the total length thereof widened by more than 2 meters, it would result in the said road being a Competing Road from the date when developing activity commences. installation, processing, transportation, 12(xi) The consequence of a Competing Road being allowed to come into existence, is in Article 35.4 of the Concession Agreement, for the same provides the compensation for Competing Road and reads: In the event that an Additional Tollway or a Competing Road, as the case may be, is opened to traffic in breach of this Agreement, the Authority shall pay to the Concessionaire, for each day of breach, compensation in a sum equal to the difference between the average daily Realisable Fee and the projected daily Fee (the "Projected Fee") until the breach is cured. The Projected Fee hereunder shall be an amount equal to the Average Daily Fee, increased at the close of every month by 0.5% (zero point five per cent) thereof and revised in accordance with Article 27.2. For the avoidance of doubt, the Average Daily Fee for 11 (1881) 16 Ch D 719 12 (2001) EWCA CIV 1089 O.M.P. (COMM) 261/2024 Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:11.02.2025 17:50:46 Signature Not Verified Digitally Signed By:CHANDRASHEKHARAN HARI SHANKAR Signing Date:11.02.2025 17:44:38 the purposes of this Article shall be the amount so determined in respect of the Accounting Year or period, as the case may be, occurring prior to such opening or operation of an Additional Tollway or a Competing Road, as the case may be. 12(xii) The compensation for allowing a Competing Road to be constructed, as per Article 35.4 of the Concession Agreement, requires the Tribunal to keep in mind that the compensation triggers only when the Competing Road ‘is opened to traffic’. A road being ‘opened to traffic’ means that the travel lanes are available for the unrestricted flow of traffic, and this has to be in the realm of reality i.e. actually existing in the world. Thus, it is only when such road (Competing Road) is opened to traffic, can the toll revenues of the Claimant be impacted. Thus, the compensation provision triggers not when a Competing Road is constructed as projected by the Claimant. The right to seek compensation triggers only when such road is opened to traffic. The interplay between the definition of a Competing Road and the compensation for said Competing Road being opened to traffic, plainly means that such paved road has to be opened to traffic after 75% length thereof is widened by more than 2 meters for the entitlement to compensation to kick-in. 12(xiii) Learned Senior Counsel for the Claimant, with respect to the interpretation of Competing Road, had argued that if the interpretation as proposed by him was not accepted, Respondent (a public authority) could cheat the concessionaire by widening an existing paved road by more than 2 meter thereof only to the extent of 74.99% to avoid the 75% limit and just a day after the end of the concession period widen the same by 0.01%. This would be rank cheating; an act to be frowned upon. As the Tribunal has noted, by accepting the data tabulated by the Claimant, in para 12(iv), only widening to the extent of 5.21% of Savli Road commenced before the Project Highway was opened to toll and even this segment was ultimately widened on 16.01.2016 i.e. a little over one month after the Project Highway was opened for tolling. The theoretical argument need not be answered by the Tribunal as the same does not arise to be considered in the facts of the instant case, because the process of widening of only 5.21% of the Savli Road commenced prior to when the Project Highway was opened to toll and even that segment was widened after the tolling commenced. 12(xiv) The compensation claim for Savli Road even if it is treated as a Competing Road when tolling commenced on the Project Highway must therefore fail.” O.M.P. (COMM) 261/2024 Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:11.02.2025 17:50:46 Signature Not Verified Digitally Signed By:CHANDRASHEKHARAN HARI SHANKAR Signing Date:11.02.2025 17:44:38

21. From a reading of the aforesaid passages from the impugned award, the reasoning adopted by the Arbitral Tribunal, for arriving at a finding that IRB is not entitled to its claim for compensation under Article 35.4 of the CA may be set out thus: (i) Out of a total 119 km length of the Savli Road, 92.31 km had been widened. This amounted to 77.56%. (ii) Of this stretch, the entire exercise of widening of the road, except for 6.2 km of the Ode-Umreth stretch, commenced and was completed after 6 December 2015, when the Project Highway was opened to toll. (iii) The 6.2 km Ode-Umreth stretch constituted 5.21% of the Savli Road. (iv) The Savli Road was a “Competing Road”, within the meaning of definition of the expression as contained in the CA. On this aspect, the Arbitral Tribunal has followed para 104 of the interim award dated 14 October 2021, rendered by it. (v) The right to seek compensation from NHAI, for breach of Article 6.3 of the CA, in terms of Article 35.4, triggered only when the Competing Road was opened to traffic. A road could be treated as having been “opened to traffic” only when all its travel lanes were available for unrestricted flow of traffic as it was only then that the toll revenue of IRB could be set to be O.M.P. (COMM) 261/2024 Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:11.02.2025 17:50:46 Signature Not Verified Digitally Signed By:CHANDRASHEKHARAN HARI SHANKAR Signing Date:11.02.2025 17:44:38 impacted. (vi) In the present case, the commencement and construction of the entire stretch of the Competing Road, except for 5.21%, representing the Ode-Umreth stretch, was after 6 December 2015, when IRB started collecting toll from the Project Highway. Even in respect of the Ode-Umreth stretch, completion of widening was only on 16 January 2016. (vii) As such, no part of the Competing Road had been “opened to traffic” prior to commencement of collection of toll from the Project Highway by IRB, on 6 December 2015. (viii) The right to compensation, in terms of Article 35.4 of the CA, had not, therefore, been triggered before IRB commenced collecting toll from the Project Highway. Ergo, IRB’s claim to compensation had to fail.

22. Clearly, the entire controversy revolves around Articles 6.3 and

35.4 of the CA, chiefly the latter, in the light of the definition of “Competing Road” in the CA. This Court is, therefore, required to examine whether the interpretation, by the Tribunal, of these covenants, can sustain Section 34 scrutiny.

23. The extent to which interpretation of contract, by an Arbitral Tribunal, can be vivisected under Section 34 of the 1996 Act has been subject matter of several judicial authorities. The parameters of O.M.P. (COMM) 261/2024 Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:11.02.2025 17:50:46 Signature Not Verified Digitally Signed By:CHANDRASHEKHARAN HARI SHANKAR Signing Date:11.02.2025 17:44:38 judicial review, in this regard, stand authoritatively delineated, most recently, in DMRC Ltd v Delhi Airport Metro Express Pvt Ltd13, the relevant passages of which may thus be reproduced: “34. The contours of the power of the competent court to set aside an award under Section 34 has been explored in several decisions of this Court. In addition to the grounds on which an arbitral award can be assailed laid down in Section 34(2), there is another ground for challenge against domestic awards, such as the award in the present case. Under Section 34(2-A) of the Arbitration Act, a domestic award may be set aside if the Court finds that it is vitiated by “patent illegality” appearing on the face of the award. In Associate Builders v DDA14, a two-Judge Bench of this 35. Court held that although the interpretation of a contract is exclusively within the domain of the arbitrator, construction of a contract in a manner that no fair-minded or reasonable person would take, is impermissible. A patent illegality arises where the arbitrator adopts a view which is not a possible view. A view can be regarded as not even a possible view where no reasonable body of persons could possibly have taken it. This Court held with reference to Sections 28(1)(a) and 28(3), that the arbitrator must take into account the terms of the contract and the usages of trade applicable to the transaction. The decision or award should not be perverse or irrational. An award is rendered perverse or irrational where the findings are: (i) based on no evidence; (ii) based on irrelevant material; or (iii) ignores vital evidence.

36. Patent illegality may also arise where the award is in breach of the provisions of the arbitration statute, as when for instance the award contains no reasons at all, so as to be described as unreasoned. ***** In Ssangyong Engg. & Construction Co. Ltd. v NHAI15, a 38. two-Judge Bench of this Court endorsed the position in Associate Builders v DDA16, on the scope for interference with domestic awards, even after the 2015 Amendment :