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Arbitrator is the sole judge of fact(s); interference in an Award only if error of law is shown

An Award dated 14/12/1997 by a Trial Court in Ahmednagar, on the grounds of “legal misconduct” of the Arbitrator and such decision consistently upheld up to the High Court, was restored by the Hon’ble Supreme Court in its decision in Civil Appeal No.6109 of 2017 decided on 22 August 2023.

While restoring the Award, the Hon’ble Court observed

“23. It is axiomatic that courts, while adjudging whether an arbitration award calls for interference has to be conscious that the arbitrator is the sole judge of facts; unless an error of law is shown, interference with the award should be avoided. In Bijendra Nath Srivastava v Mayank Srivastava,11it was observed,

“If the arbitrator or umpire chooses to give reasons in support of his decision it would be open to the court to set aside the award if it finds that an error of law has been committed by the arbitrator umpire on the basis of the recording of such reasons. The reasonableness of the reasons given by the arbitrator cannot, however, be challenged. The arbitrator is the sole judge of the quality of the evidence and it will not be for the court to take upon itself the task of being a judge of the evidence before the arbitrator. The court should approach an award with a desire to support it, if that is reasonably possible, rather than to destroy it by calling it illegal. [See Champsey Bhara & Co v Jivraj Baloo Spq and Wvg. Co. Ltd. (AIR 1923 PC 66); Jivrajbhai Ujameshi Sheth v Chintamanrao Balaji (1964 (5) SCR 480); Sudarshan Trading Co v Govt of Kerala (1989 (2) SCC 38); Raipur Development Authority v Chokamal Contractors (1989 ((3) SCR 144); and Santa Sila Devi v Dhirendra Nath Sen (1964 (3) SCR 410).”

“24. It is also noteworthy that the scope of jurisdiction of a court, under Section 30/33 of the Act, never extended beyond discerning if the award disclosed an “error apparent on the face of the award” which is an “error of law apparent on the face of the award and not an error of fact. The error of law can be discovered from the award itself or from a document actually incorporated therein.” (Refer to Trustees of Port of Madras v Engineering Constructions12). In the facts of the present case, the award did not, facially disclose any error of law; damages were awarded in accordance with principles embodied in law, and the findings were based on the evidence placed before the tribunal. The ruling of the trial courts and the High Court is nothing short of intense appellate review, which is impermissible in law and beyond the courts’ jurisdiction.”

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