Court emphasizes limited judicial review under Arbitration Act, restores original arbitral award in NBCC vs. J.G. Engineers dispute.
In a significant ruling, the Calcutta High Court has reinstated the original arbitral award in the dispute between M/s NBCC India Limited and M/s J.G. Engineers Pvt. Ltd., overturning the previous order by a Single Judge. The bench, comprising Justices Debangsu Basak and Md. Shabbar Rashidi, delivered the verdict on April 23, 2026, emphasizing the limitations on judicial interference under the Arbitration and Conciliation Act, 1996.
The case centered around the construction of a terminal building and allied works at Bhubaneshwar Airport. M/s J.G. Engineers Pvt. Ltd. had been awarded the contract by NBCC, which was later terminated by NBCC citing delays. The matter was referred to arbitration, resulting in an award in favor of J.G. Engineers, which included certain counterclaims in favor of NBCC.
The Single Judge had previously set aside parts of the arbitral award, ruling that the termination of the contract by NBCC was unlawful and that the counterclaims allowed by the arbitrator were unsustainable. However, the Division Bench found that the Single Judge exceeded the scope of judicial review permissible under Section 34 of the Arbitration and Conciliation Act, 1996. The bench clarified that courts should not reassess evidence or substitute their own views when the arbitrator's findings are plausible and based on evidence, even if another view is possible.
The High Court's judgment underscored the principle that courts exercising jurisdiction under Sections 34 and 37 should not act as appellate bodies akin to those under Order 41 of the CPC, reaffirming the arbitrator's role as the final arbiter in contractual disputes. The original award dated December 17, 2013, was thus restored, providing clarity on the permissible scope of judicial intervention in arbitral awards.
The ruling has significant implications for the arbitration landscape in India, reinforcing the autonomy of arbitral proceedings and the finality of arbitral awards, unless they are shown to be perverse, illegal, or shocking to the conscience of the court.
Bottom Line:
Arbitration and Conciliation Act, 1996 - Jurisdiction of courts under Sections 34 and 37 of the Act - Courts should not interfere with an arbitrator's findings if they are plausible and based on evidence, even if another view is possible.
Statutory provision(s):
Arbitration and Conciliation Act, 1996 Sections 34, 37
M/s NBCC India Limited v. M/s J.G. Engineers Pvt. Ltd., (Calcutta)(DB) : Law Finder Doc id # 2887490
