27 January 2022, Thursday

2 years ago

The appellate court cannot conduct a merits-based review under Section 37 ACA: Supreme Court of India

11 January 2022 | Haryana Tourism Limited v. M/S Kandhari Beverages Limited | Civil Appeal No. 266 of 2022 | Supreme Court of India | MR Shah & BV Nagarathna

A 2-judge bench of the Supreme Court has restored an arbitral award upheld by the set-aside court but overturned by the appellate court under Section 37 ACA. Without entering into the controversy and deciding the rival arguments, the Supreme Court noted that the High Court conducted a merit-based review.

The court noted that an award could be set aside only if it is contrary to the fundamental policy of Indian law, the interest of India, most basic notions of morality justice, or patently illegal. Because the court’s description of the set-aside grounds may confuse, a reader new to arbitration should note that “patent illegality” is now a separate ground [Section 34 (2A) ACA] than public policy [Section 34 (2) (b) (ii)) ACA]. Earlier, the decisions had considered the former a part of the latter.

Read the decision here.

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