Abhoy Charan Bakshi vs. National Highways Authority of India & Ors.
Background
A contractor was engaged by NHAI in 2005 to repair and maintain a stretch of National Highway-34 in West Bengal. Disputes arose over extra repair work the contractor claimed it had to do because of heavy rainfall, NHAI's encashment of the contractor's bank guarantee, and NHAI's refusal to refund the security deposit and performance security. An arbitral tribunal largely rejected the contractor's claims (a "nil" majority award), while a dissenting minority award would have granted partial relief. The contractor challenged the majority award in the Delhi High Court.
Decision Breakdown
The Court dismissed the petition, holding that its power under Section 34 of the Arbitration Act is extremely narrow: it cannot re-weigh evidence, substitute its own view for a "plausible" one taken by the arbitrators, or act as an appellate court correcting factual errors. The tribunal had found the disputed repair work fell within the contractor's existing scope of work, that the contractor hadn't proven it fulfilled conditions needed to get its security deposit released, and that the contractor itself had breached the contract. Since none of this met the high bar of being "patently illegal" or "perverse," the Court declined to interfere and upheld the award.
Lesson Learnt
Once parties agree to resolve a commercial dispute through arbitration, courts will almost never re-open the arbitrator's factual findings: a losing party cannot use a court challenge as a second chance to re-argue the facts of the case.