Union of India, through Executive Engineer, Jaipur Central vs For Appellant(s)

Judgment

1. The present Appeal under Section 37 of the Arbitration & Conciliation Act, 1996 (for brevity “Act of 1996”) is filed being aggrieved of the judgment dated 17.03.2025 passed by the learned Judge, Commercial Court No.3, Jaipur Metropolitan-II, whereby the Objection Application No.81/2024 filed by the appellant/non-claimant preferred under Section 34 of the Act of 1996 has been dismissed and the award dated 15.11.2022 passed by the learned Sole Arbitrator in favour of respondent/claimant was upheld. [2025:RJ-JP:33375-DB] (2 of 17) [CMA-2720/2025] The learned Sole Arbitrator while accepting the claim of the respondent-claimant in part has awarded a sum of Rs.92,03,080/- plus GST as well as future interest.

2. The facts germane to the present Appeal are as under:-

2.1 The appellant/non-claimant has issued a tender notice inviting applications for execution of work “Construction of M.T. Garage including Internal Water Supply & Sanitary and Installation Drainage, Internal Electrification, Electrical Fans and Fittings at BSF Campus, Choup and Kalighati, Jaipur”. The estimated cost of the work was Rs.2,76,30,009/-. The duration of work was 9 months.

2.2 The bid submitted by the respondent-claimant was accepted on 03.09.2016 and the tender work was awarded at the rate of Rs.2,14,90,621/-. The date of commencement of work as fixed was 18.09.2016 and stipulated date of completion was

17.06.2017.

2.3 The respondent-claimant, after receiving the Work Order has prepared working plan and mobilized the resources for initiation of the work. The architectural and structural drawing were supplied by the appellant/non-claimant to the respondent-claimant with some delay on 09.11.2016 and lay-out plan was supplied on

01.12.2016, thereafter, the appellant/non-claimant started the work under the contract.

2.4 The entire work at BSF Campus Choup was completed in Dec. 2017; however, a part of the work at BSF Kalighati Campus

was not completed. As per the pleadings of the parties, there had been various hindrances in the work, which were even accepted by the appellant/non-claimant and therefore, the extension of time of completion was approved by the appellant/non-claimant from (i)

16.06.2017 to 31.07.2017, (ii) 31.10.2017 to 30.11.2017 and (iii)

31.08.2017 to 30.09.2018. [2025:RJ-JP:33375-DB] (3 of 17) [CMA-2720/2025] The hindrances in the work were attributable to various reasons, inter alia, non-availability of the approach road, non- availability of the river-sand due to ban imposed by the Hon’ble Supreme Court and also due to delay in payments of running bills, resulting in scarcity of funds with the Contractor.

2.5 The respondent-claimant has stated that the difficulties faced by the claimant have duly been informed to the appellant/non- claimant; however, the issues raised and grievances made have not been resolved by the appellant/non-claimant in its entirety and within reasonable time. Instead of resolving the said difficulties, the appellant/non-claimant has issued show-cause notice under Clause 3 of the Contract Agreement and further granted time extension from 31.08.2018 to 30.09.2018 to complete the work. The respondent-claimant has expressed its inability to complete the said work as the circumstances were beyond the control of both the parties and the genuine issues raised were not being addressed by the appellant/non-claimant.

2.6 The appellant/non-claimant while invoking Clause 3 of the Contract Agreement has issued the order dated 14.09.2018 and terminated the contract. Thereafter, the respondent-claimant has raised its claims under Clause 25 of the Contract Agreement on

15.06.2019, 04.07.2019 and 10.08.2019. The competent authority i.e. Superintending Engineer (“SE”) instead of addressing the said claim has issued a show-cause notice dated

19.06.2019, which was replied by the respondent-claimant on

03.07.2019.

2.7 The issues so arose between the parties were referred to Disputes Redressal Committee (DRC) vide order dated 22.10.2019 and the DRC after its first meeting has issued instructions to prepare and pay final bill on 15.01.2020. [2025:RJ-JP:33375-DB] (4 of 17) [CMA-2720/2025]

2.8 In the meantime, a second show-cause notice was issued by the Chief Engineer (“CE”) on 18.02.2020 and the CE while passing its order on 18.06.2020 has proceeded to levy compensation over the respondent-claimant @ 10% of the tender amount i.e. Rs.21,49,062/- as per Clause 2 of the Contract Agreement. Thereafter, the DRC has passed its decision on 24.08.2020 rejecting the claims of the respondent-claimant.

2.9 Being aggrieved of the order of termination dated

14.09.2018, order of levy compensation dated 18.06.2020, rejection of claims by DRC dated 24.08.2020 and for claiming other amounts, the respondent-claimant invoked the Arbitration Clause and the appellant-Department referred the matter to the learned Sole Arbitrator vide order dated 05.04.2021.

2.10 The parties appeared before the learned Sole Arbitrator. The respondent-claimant submitted its Statement of Claim, including 13 claims in total, praying for an amount of Rs.1,91,59,729/- along with interest. The Statement of Defence along with the counter claim to the tune of Rs.18,42,004/- was filed on behalf of the appellant/non-claimant. The Rejoinder was filed on behalf of the respondent-claimant. The parties have submitted various documents as well as case laws in support of their pleadings. The parties consented that the matter may be decided on the basis of the pleadings and document available on record and while considering the oral as well as written arguments submitted on behalf of both the parties.

2.11 The learned Sole Arbitrator after considering the pleadings of the parties, the evidences placed on record and the arguments advanced has passed a detailed and reasoned award dated

15.11.2022 while taking into account the terms and conditions of the Contract as well as the various precedents relied on by the rival parties. The learned Sole Arbitrator has framed 9 points of [2025:RJ-JP:33375-DB] (5 of 17) [CMA-2720/2025] adjudication “Genesis of all the Claims”. After deciding all of them individually, has recorded a conclusion that there had been various hindrances and delay in the execution of the contract work, which are not attributable to the claimant-Contractor. The learned Sole Arbitrator has also recorded finding while considering the documents available on record that even as per the Hindrance Register, most of the delay was on the part of the appellant- Department and due to which the extensions were being granted, but the ground difficulties have not been cured. The learned Sole Arbitrator has also held that in view of the terms of the Contract, the CE has acted beyond his jurisdiction and without considering the reply dated 03.07.2019, the order dated 16.06.2020 for imposing compensation has been passed, which is not sustainable in the eye of law. The points for adjudication were decided by the learned Sole Arbitrator while discussing the evidence available on record and the case laws cited by both the parties. The learned Sole Arbitrator has also considered the true interpretation and intent of Clause 2 and Clause 3 of the Contract Agreement. While referring to the various Clauses of the Contract Agreement, more specifically Clause 5 of Schedule-F, which provides for (i) extension of time, (ii) rescheduling of mine-stones and (iii) shifting of date of start in case of handing over of site, the learned Sole Arbitrator recorded a finding that the plea “time is the essence of contract” is not sustainable. After adjudicating the genesis of claims, the learned Sole Arbitrator has adjudicated each of the 13 claims separately. The learned Sole Arbitrator while passing the award dated 15.11.2022 has declared the order of termination dated 14.09.2016 as well as order of levy of compensation dated 18.06.2020 to be bad in law and has awarded a sum of Rs.92,03,080/- along with future [2025:RJ-JP:33375-DB] (6 of 17) [CMA-2720/2025] interest in favour of the respondent-claimant, in comparison to its claim to the tune of Rs.1,91,59,729/-.

2.12 While challenging the said award dated 15.11.2022, the appellant/non-claimant has filed the Objection Application under Section 34 of the Act of 1996, which was dismissed by the learned Commercial Court No.3, Jaipur Metropolitan-II vide its order dated

17.03.2025. Hence, the present Appeal.

3. The appellant/non-claimant has challenged the award dated

15.11.2022 as well as the order passed by the learned Commercial Court dated 17.03.2025 on, inter alia, following grounds: (i) The evidence available on record, more specifically the letters issued by the appellant/non-claimant calling upon the respondent-claimant to complete the work have not been considered by the learned Sole Arbitrator. (ii) The termination of Contract was not due to delay on the part of appellant/non-claimant, but because of the request for foreclosure made by the respondent- claimant, therefore, the Contract was rightly terminated. The finding recorded in this regard is not sustainable in the eyes of law. (iii) The blockage of road by the BSF Officers’ Society, which is different than BSF-69 Battalion, cannot be a ground to attribute delay on the part of appellant/non- claimant as it was the responsibility of the Contractor to make the approach road and to maintain the same in good condition. (v) The delay in providing lay-out plan and structural design, in want of programme chart cannot be [2025:RJ-JP:33375-DB] (7 of 17) [CMA-2720/2025] attributed to appellant/non-claimant in view of the documents available on record. (vi) The amount awarded under the head of loss of opportunities, loss of profit and overhead charges etc. was not justified in absence of specific evidence in that regard. (vii) The issue with regard to the construction of 500 M GSB Road from Gate No.2 to BSF Society was wrongly decided by the learned Sole Arbitrator.

4. Replying to the contentions raised by the counsel for the appellant, the counsel for the respondent argued that a bare perusal of award dated 15.11.2022 clearly shows that all the relevant evidence available on record were duly taken into account by the learned Sole Arbitrator and the same have been considered in view of the Clauses of Contract Agreement as well as the relevant case laws. It was argued that all the contentions raised in the Memo of Appeal were already being raised before the learned Sole Arbitrator and the same were adjudicated in detail by the learned Sole Arbitrator. Further, even the learned Commercial Court has also noted the contentions of the appellant and while analysing the same with the specific findings recorded by the learned Sole Arbitrator has rejected the said contentions. The counsel for the respondent contended that the learned Sole Arbitrator has objectively considered the claims submitted by the respondent-claimant and in comparison to the total claim of Rs.1,91,59,729/-, only a sum of Rs.92,03,080/- has been awarded in its favour. The counsel for the respondent-claimant while referring to the judgment passed by the Hon’ble Apex Court has argued that the scope of interference of this Court under Section 37 of the Act of 1996 is very limited and the re-appreciation of the [2025:RJ-JP:33375-DB] (8 of 17) [CMA-2720/2025] evidence is not permissible at this stage of adjudication. It was submitted that the concurrent findings of both the authorities below cannot be interfered with.

5. Heard learned Counsel for the parties and perused the material available on record. ANALYSIS AND REASONING:

6. At this stage, it is relevant to first refer to Section 34 and 37 of the Act of 1996 to understand the scope of interference by the Court. The relevant part of Section 34 and 37 of the Act of 1996 reads as under:

34. Application for setting aside arbitral award — (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3). (2) An arbitral award may be set aside by the Court only if— (a) …. (b) the Court finds that— (i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or (ii) public policy of India. the arbitral award is in conflict with the Explanation 1.— For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,— (i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or (ii) policy of Indian law; or (iii) morality or justice. it is in conflict with the most basic notions of it is in contravention with the fundamental Explanation 2.—For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute. (2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award: Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence. (3) …. (4) …. (5) …. (6) …. [2025:RJ-JP:33375-DB] (9 of 17) [CMA-2720/2025]

37. Appealable orders — (1) Notwithstanding anything contained in any other law for the time being in force, an appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:— (a) …. (b) …. (c) setting aside or refusing to set aside an arbitral award under section 34. (2) …. (3) …. A bare perusal of the said provisions shows that under Section 34 of the Act of 1996, an arbitral award can be modified only if limited grounds as enumerated under Section 34 of the Act of 1996 are made out. So far as Section 37 is concerned, the same provides for an appeal against the order passed under Section 34 for setting aside or refusing to set aside an arbitral award; however, no separate ground for interference are enumerated under Section 37 of the Act of 1996.

7. In the case in hand, the findings recorded by the Arbitrator and the Commercial Court while dismissing the application under Section 34 are concurrent. The interference under section 37 cannot be beyond the grounds as available under section 34 of the act. The court has to be very careful before disturbing the concurrent findings. Sub-section 2A in Section 34 of the Act, was inserted wherein the ground of patent illegality on the face of award was added as a ground for interference in the award. But the proviso thereto stipulates that erroneous application of law or on re-appreciation of evidence, the award cannot be set-aside.

8. Our view is supported by the judgment passed by the Hon’ble Apex Court in the case of MMTC Limited vs. Vedanta Limited reported in [(2019) 4 SCC 163] :- It is relevant to note that after the 2015 amendments “13. to Section 34, the above position stands somewhat modified. Pursuant to the insertion of Explanation 1 [2025:RJ-JP:33375-DB] (10 of 17) [CMA-2720/2025] to Section 34(2), the scope of contravention of Indian public policy has been modified to the extent that it now means fraud or corruption in the making of the award, violation of Section 75 or Section 81 of the Act, contravention of the fundamental policy of Indian law, and conflict with the most basic notions of justice or morality. Additionally, subsection (2A) has been inserted in Section 34, which provides that in case of domestic arbitrations, violation of Indian public policy also includes patent illegality appearing on the face of the award. The proviso to the same states that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence. 14. As far as interference with an order made under Section 34, as per Section 37, is concerned, it cannot be disputed that such interference under Section 37 cannot travel beyond the restrictions laid down under Section 34. In other words, the Court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the Court under Section 34 has not exceeded the scope of the provision. Thus, it is evident that in case an arbitral award has been confirmed by the Court under Section 34 and by the Court in an appeal under Section 37, this Court must be extremely cautious and slow to disturb such concurrent findings.”

9. The scope of interference under Section 37 of the “Act of 1996” is even narrower as compared to that of Section 34 of the “Act of 1996” and cannot be equated with the normal appellate jurisdiction of the court. The inspection ought to be limited to see as to whether the court under Section 34 has travelled beyond the limited grounds enshrined in Section 34 ? Hon’ble Supreme Court in UHL Power Co. Ltd. v. State of H.P., [(2022) 4 SCC 116] held as follows - “16. As it is, the jurisdiction conferred on courts under Section 34 of the Arbitration Act is fairly narrow, when it comes to the scope of an appeal under Section 37 of the Arbitration Act, the jurisdiction of an appellate court in examining an order, setting aside or refusing to set aside an award, is all the more circumscribed. In MMTC Ltd. v. Vedanta Ltd. [MMTC Ltd. v. Vedanta Ltd., (2019) 4 SCC 163 : (2019) 2 SCC (Civ) 293], the reasons for vesting such a limited jurisdiction on the High Court in exercise of powers under Section 34 of the Arbitration Act have been explained in the following words: (SCC pp. 166-67, para 11) “11. As far as Section 34 is concerned, the position is well-settled by now that the Court does not sit in appeal over the arbitral award and may interfere on merits on the limited ground provided under Section 34(2)(b)(ii) i.e. if the award is [2025:RJ-JP:33375-DB] (11 of 17) [CMA-2720/2025] against the public policy of India. As per the legal position clarified through decisions of this Court prior to the amendments to the 1996 Act in 2015, a violation of Indian public policy, in turn, includes a violation of the fundamental policy of Indian law, a violation of the interest of India, conflict with justice or morality, and the existence of patent illegality in the arbitral award. Additionally, the concept of the “fundamental policy of Indian law” would cover compliance with statutes and judicial precedents, adopting a judicial approach, compliance with the principles of natural justice, and Wednesbury [Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn., (1948) 1 KB 223 (CA)] reasonableness. Furthermore, “patent illegality” itself has been held to mean contravention of the substantive law of India, contravention of the 1996 Act, and contravention of the terms of the contract.””

10. Hon’ble Supreme Court in Haryana Tourism Limited vs. Kandhari Beverages Limited (2022) 3 SCC 237, has clearly held that a High Court under Section 37 of the Act, cannot go into the merits of the case. Relevant excerpt of the judgment is reproduced herein below- “7. So far as the impugned judgment and order passed by the High Court quashing and setting aside the award and the order passed by the Additional District Judge under Section 34 of the Arbitration Act are concerned, it is required to be noted that in an appeal under Section 37 of the Arbitration Act, the High Court has entered into the merits of the claim, which is not permissible in exercise of powers under Section 37 of the Arbitration Act. 8. As per settled position of law laid down by this Court in a catena of decisions, an award can be set aside only if the award is against the public policy of India. The award can be set aside under Sections 34/37 of the Arbitration Act, if the award is found to be contrary to, (a) fundamental policy of Indian Law; or (b) the interest of India; or (c) justice or morality; or (d) if it is patently illegal. None of the aforesaid exceptions shall be applicable to the facts of the case on hand. The High Court has entered into the merits of the claim and has decided the appeal under Section 37 of the Arbitration Act as if the High Court was deciding the appeal against the judgment and decree passed by the learned trial Court. Thus, the High Court has exercised the jurisdiction not vested in it under Section 37 of the Arbitration Act. The impugned judgment and order passed by the High Court is hence not sustainable.” [2025:RJ-JP:33375-DB] (12 of 17) [CMA-2720/2025]

11. The Hon’ble Supreme Court in Punjab State Civil Supplies Corporation Limited & Anr. vs. M/s Sanman Rice Mills & Ors. Reported in (2024) INSC 742 has held that while exercising the powers under Section 37 of the Act of 1996, the Court cannot sit in an appeal against the arbitral award and the reappraisal of the evidence is not permissible. The relevant extract is quoted below: “20. In view of the above position in law on the subject, the scope of the intervention of the court in arbitral matters is virtually prohibited, if not absolutely barred and that the interference is confined only to the extent envisaged under Section 34 of the Act. The appellate power of Section 37 of the Act is limited within the domain of Section 34 of the Act. It is exercisable only to find out if the court, exercising power under Section 34 of the Act, has acted within its limits as prescribed thereunder or has exceeded or failed to exercise the power so conferred. The Appellate Court has no authority of law to consider the matter in dispute before the arbitral tribunal on merits so as to find out as to whether the decision of the arbitral tribunal is right or wrong upon reappraisal of evidence as if it is sitting in an ordinary court of appeal. It is only where the court exercising power under Section 34 has failed to exercise its jurisdiction vested in it by Section 34 or has travelled beyond its jurisdiction that the appellate court can step in and set aside the order passed under Section 34 of the Act. Its power is more akin to that superintendence as is vested in civil courts while exercising revisionary powers. The arbitral award is not liable to be interfered unless a case for interference as set out in the earlier part of the decision, is made out. It cannot be disturbed only for the reason that instead of the view taken by the arbitral tribunal, the other view which is also a possible view is a better view according to the appellate court.”

12. Taking guidance from the position of law settled in the above-mentioned authoritative pronouncements, it is found that the grounds raised in the present appeal are not falling within the limited ambit of Section 37 read with Section 34 of the Act of

1996. The interference sought to be made by the appellant/non- claimant was on the alleged ground of non-consideration of some of the communications issued by the appellant-Department, which requires re-appreciation of the evidence which is not at all [2025:RJ-JP:33375-DB] (13 of 17) [CMA-2720/2025] permissible at the stage of adjudicating the appeal under Section 37 of the Act of 1996.

12.1 A bare perusal of the award shows that after narrating the entire facts and the details regarding arbitral proceedings, the learned Sole Arbitrator has framed 9 points of consideration as Genesis of all the claims i.e. (A) Analysis of Clause 2 & 3 of the Agreement. (B) Facts related to delay and who is responsible for the delay and what were its consequences ? If the time was the essence of the contract and if not, what were its consequences ? (C) (D) Analysis of order dated 14.09.2018 of the respondent under Clause 3 and its validity ? (E) Analysis of order dated 18.06.2020 of the respondent (F) (G) (H) (I) under Clause 2 and its validity ? If any other authority other than that empowered under the Agreement has taken action under Clause 2 and its admissibility? If Clause 2 was operated after determination of contract under Clause 3 and its tenability ? If the action under Clause 2 & 3 was taken without considering Hindrance Register and the order of the shifting of milestone and its tenability under the Contract ? If the maximum compensation/recovery against EOT @ 10% of the contract amount (as levy-able only under Clause 2 of the Contract) can be imposed in the final bill before order of compensation under Clause 2 of the Contract is permissible. A perusal of the award clearly shows that the learned Sole Arbitrator has considered the entire evidence and material available on record in the light of Clause 2 & 3 of the Contract Agreement. The learned Sole Arbitrator has not only considered the true interpretation of Clause 2 & 3 of the Contract Agreement as well as the jurisdiction of the authority under the Contract, but has also decided the issues while holistically considering the documents available on record. While referring to the Hindrance Register, the learned Sole Arbitrator has clearly recorded a finding that the delay beyond the stipulated date of completion was [2025:RJ-JP:33375-DB] (14 of 17) [CMA-2720/2025] caused for the reason fully attributable to the appellant/non- claimant. Such justified conclusion recorded by the learned Sole Arbitrator after recording the finding based on evidence available on record cannot be interfered with under Section 37 of the Act of

12.2 The conduct of the appellant/non-claimant in granting repeated time extensions clearly shows that even the appellant/non-claimant was aware of the fact that the reasons for delay were beyond the control of the Contractor. In ground (M) of the Memo of Appeal, the appellant/non-claimant has tried to suggest that net effective hindrance attributable to the appellant- Department would be around 60 days, attributable to Contractor would be around 280 days and not attributable to both would be around 39 days. Without accepting the said contention in essence, it is clear admission on the part of the appellant-Department that there had been delay on the part of the appellant-Department or the delay which was beyond the control of the appellant- Department or the Contractor. However, the appellant-Department prayed for shifting of its own opinion regarding quantification of days over the findings recorded by the learned Sole Arbitrator, which is not within the limited permissible scope of Section 37 of the Act of 1996.

12.3 In view of the admitted facts, it is clear that the respondent- claimant has completed the work regarding BSF Campus Choup, but could not complete the work at BSF Campus Kalighati due to various reasons beyond the control of respondent-claimant. The appellant/non-claimant has admitted that earlier the approach- road through the BSF Officer’s Colony was made available for transportation, but the same was blocked/closed by the BSF Officers’ Society. The appellant/non-claimant has advanced the justification that BSF-69 Battalion is different than the BSF [2025:RJ-JP:33375-DB] (15 of 17) [CMA-2720/2025] Officers’ Society and therefore, rightly closed the approach-road and shifted the responsibility of making available the approach- road upon the Contractor in the midst of the contract work. The said justification was rightly disputed by the learned Sole Arbitrator.

12.4 From the perusal of the award impugned, it is clear that the learned Sole Arbitrator while referring to the series of documents has clearly recorded the finding that the consistent problems faced by the Contractor and the grievance raised were not being addressed or resolved by the appellant/non-claimant and thus, held the appellant/non-claimant guilty of causing delay. Such factual finding recorded by the learned Sole Arbitrator cannot be interfered with at this stage by reappreciation of the evidence.

12.5 The ground raised by the appellant regarding quantification done by the learned Sole Arbitrator under the head of loss of opportunity, loss of profit and overhead charges is also not sustainable as the learned Sole Arbitrator has holistically considered the said claims and has undertaken pro rata assessment of loss and damages as per Hudson formula as approved by the Hon’ble Apex Court in the case of Mc Dermott International Inc. vs. Burn Standard Company Ltd. & Ors. [2006 (2) Arb.LR 498 SC] and has awarded the claim in favour of the respondent-claimant.

12.6 The issues raised with regard to delay in issuing lay-out plan as well as the issue regarding 500 M GSB are also factual in nature, based upon the findings recorded on appreciation of evidence are also not open for interference.

12.7 The learned Sole Arbitrator has discussed and decided each of the claims of the respondent-claimant independently and while objectively adjudicating the same has partly allowed the claims. As against the total claim of Rs.1,91,59,729/- raised by the [2025:RJ-JP:33375-DB] (16 of 17) [CMA-2720/2025] respondent-claimant, the learned Sole Arbitrator has awarded a sum of Rs.92,03,080/-. The appellant/non-claimant has failed to make out any ground of misconduct against the learned Sole Arbitrator.

13. The appellant/non-claimant has failed to show any violation of the public policy of Indian law or patent illegality in the arbitral award. In the context of arbitral proceedings, patent illegality means a fundamental flaw in the arbitral award, which shocks the conscious of the Court and renders the award invalid. The appellant/non-claimant has also failed to make out any case for misinterpretation of Clause of Contract Agreement or non- compliance of any statutory provision or the award based on no evidence. The learned Commercial Court has also taken into account the grounds raised by the appellant/non-claimant and while referring to the findings recorded by the learned Sole Arbitrator has recorded its concurrence in clear terms. The grounds raised by the appellant/non-claimant do not fall within the scope and ambit of Section 34 read with Section 37 of the Act of

14. The Hon’ble Apex Court in Bombay Slum Redevelopment Corpn. (P) Ltd. v. Samir Narain Bhojwani, [(2024) 7 SCC 218] has observed that the grounds to be raised in an appeal under Section 37 of the Act of 1996 must be the grounds covered under Section 34 of the Act of 1996. Otherwise, the very object of adopting the UNCITRAL model will be frustrated. The relevant excerpt of the judgment is reproduced herein :- “36. In many cases, the proceedings under Sections 34 and 37 are being treated as if the same are appeals under Section 96 CPC. When members of the Bar take up so many grounds in petitions under Section 34, which are not covered by Section 34, there is a tendency to urge all those grounds which are not available in law and waste the Court's time. The time of our Courts is precious, considering the huge pendency. This is happening in a [2025:RJ-JP:33375-DB] (17 of 17) [CMA-2720/2025] large number of cases. All this makes the arbitral procedure inefficient and unfair. It is high time that the members of the Bar show restraint by incorporating only legally permissible grounds in petitions under Section 34 and the appeals under Section 37. Everyone associated with the arbitral proceedings must remember that brevity will make the arbitral proceedings and the proceedings under Sections 34 and 37 more effective. All that we say is that all the stakeholders need to introspect. Otherwise, the very object of adopting the UNCITRAL Model will be frustrated. We are not called upon to consider whether the arbitral proceedings are cost-effective. In an appropriate case, the issue will have to be considered. Arbitration must become a tool for expeditious, effective, and cost-effective dispute resolution.”

15. In view of above observations and analysis, this Court does not find any ground to interfere with the award dated 15.11.2022 passed by the learned Sole Arbitrator and the order impugned dated 17.03.2025 passed by the learned Commercial Court and the same are hereby, affirmed.

16. The appeal is therefore, dismissed.

17. Stay petition and all pending applications, if any, stand disposed of. (SANJEET PUROHIT),J (SANJEEV PRAKASH SHARMA),J TN/