In the case of Punjab State Civil Supplies Corporation Ltd. & Anr. vs. M/s Sanman Rice Plants & Ors., the Preeminent Court ruled in favor of the appealing party, setting aside the choice of the Punjab and Haryana High Court and reestablishing the initial arbitral grant. The case rotated around a contract debate including the supply and handling of paddy, which brought about in an intervention grant favoring the Punjab State Gracious Supplies Enterprise (PUNSUP). The Tall Court had already toppled this grant, but the Incomparable Court clarified the limits of legal mediation in intervention cases, strengthening the guideline that courts should regard the choices of arbitral tribunals unless there's a clear infringement of open approach or law.
Background
In 2008, PUNSUP entered into an understanding with M/s Sanman Rice Plants for the processing of paddy and the return of the handled rice. The Enterprise provided a add up to of 70,997.50 quintals of paddy, but the Rice Process conveyed as it were portion of the handled rice, coming about in a shortage of 35,110.39 quintals, esteemed at ₹7,16,15,716. In reaction, the Rice Process issued cheques totaling ₹5 crore, clearing out an extraordinary adjust of ₹2,16,15,716. This debate was alluded to arbitration, where the authority granted ₹2,67,66,804 to PUNSUP, counting intrigued at 12% per annum .
Supreme Court’s Analysis
The question of whether the High Court's interference with the arbitral award under Section 37 was appropriate was posed to the Supreme Court. The main point of contention was the extent to which judges may intervene in arbitration processes, namely in light of Sections 34 and 37 of the Act. The Court underlined that the purpose of the 1996 Arbitration and Conciliation Act was to offer a quick and affordable substitute for traditional litigation with the least amount of involvement from the courts. Judicial interference is expressly prohibited by Section 5 of the Act, which only permits it in situations when Part I of the Act specifically permits it.
A court may only set aside an arbitral result under Section 34 for specific reasons, such as where the award violates Indian public policy or is invalid in terms of patents.
Legal Precedents Cited
The Supreme Court cited several key precedents to support its decision. In Bharat Coking Coal Ltd. v. L.K. Ahuja (2001), the Court had held that courts should not interfere with an arbitral award unless the arbitrator had exceeded the terms of the agreement or there was a complete absence of evidence.
Similarly, in MMTC Limited v. Vedanta Limited (2019), the Court emphasized that judicial intervention should be rare and limited to cases where the award violates public policy. The Court also referred to its judgment in Dyna Technology Pvt. Ltd. v. Crompton Greaves Ltd. (2019), which underscored that arbitral awards should not be interfered with casually or cavalierly unless there is clear perversity in the award that goes to the root of the matter.
Conclusion and Judgment
The Supreme Court held that the Tall Court had blundered in setting aside the arbitral grant. The Tall Court's choice to topple the grant was based on a reappraisal of the realities and prove, which went past the contract scope of legal audit allowed beneath Segments 34 and 37 of the Act. The Court expressed:
"The Re-appraising Court has no specialist of law to consider the matter in debate some time recently the arbitral tribunal on merits so as to discover out whether the choice of the arbitral tribunal is right or off-base upon reappraisal of prove as in the event that it is sitting in an standard court of appeal."
Click Here to: Download/View Related File
TAGS: arbitration judicial interference Arbitration and Conciliation Act arbitral award Section 34 Section 37 Supreme Court of India
