The Delhi High Court has held that non-consideration of a clause of a contract cannot be said to be an error made by the Arbitral Tribunal which is opposed to the fundamental policy of Indian law. The Bench noted that the concession agreement was neither a statute, nor was it a law which protected the national interests of the country. Therefore, a mere failure of the arbitral tribunal to consider an argument on the same would not render the arbitral award in contravention of the fundamental policy of Indian law.

The agreement took place between the Appellant, NHAI and the Respondent, GVK Jaipur Expressway Pvt. Ltd. regarding construction of toll plazas. The Arbitral Award rejected the claim for compensation raised for the construction of additional toll lanes.

The Bench held that patent illegality has been held to mean an illegality that goes to the root of a matter, not an erroneous application of law.

Noting that the reasoning given by the Arbitral Award, which was based upon an interpretation of Clause 18.1, was a plausible view, the court said, “The re-interpretation of Clause 18 of the Concession Agreement by the ld. Single Judge would amount to a re-appreciation of evidence which is impermissible under Section 34 of the Arbitration Act. The Ld. Single Judge had correctly in the Impugned Judgment observed that its disagreement with view of the arbitral tribunal pertaining to the interpretation of Clause 18.1 is beyond the scope of its jurisdiction under Section 34 of the Arbitration Act.”

The court thus allowed the appeal and set aside the judgment of the Single Judge.


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