13 December 2021 | SMS Water Grace BMW Pvt. Ltd. v. Govt. of NCT of Delhi | OMP (Comm.) No. 537 of 2020 | Vibhu Bakhru J | Delhi High Court | 2021 SCC OnLine Del 5302
The petitioner had to collect and dispose of biomedical waste from all health care establishments identified by the Delhi government. The disputed clause read:
“The contractor shall collect, transport, treat and dispose of all Biomedical waste (about 1000 kg/day) from all health care establishments … free of charge during the contract period.”
The tribunal looked at the “surrounding circumstances” to determine parties’ intention and ruled that the clause did not cap the maximum biomedical waste the petitioner was obligated to handle.
The court noted that an agreement had to be read as a whole, and there was no other provision in the agreement to support the petitioner's interpretation. It agreed with the arbitrator’s view but added that its agreement was not relevant as the scope of examination in set aside proceedings is limited to ascertain whether the award is vitiated by patent illegality or public policy of India, neither of which applied in the case. The court reiterated that the arbitral tribunal is the final authority to interpret the contract.
The authorities referred by the court include MSK Projects (2011) 10 SCC 573, where the Supreme Court has explained the difference between an error within jurisdiction (error of construction) that does not warrant any interference and a jurisdictional error, that is when the arbitrator deals with matters outside.
Read the decision here.
Categories: Application for Setting Aside Arbitral Award | Arbitrators Interpretation of Contract | Associate Builders | Error Within Jurisdiction | Fundamental Policy of Indian Law | Jurisdictional Error | Merits Based Review | Patent Illegality | Plausible View | Public Policy | Public Policy of India | Reappreciation of Evidence | Revaluation of Evidence | Review on the Merits of the Dispute | Section 34 (2) (a) ACA | Section 34 (2) (b) (ii) ACA | Section 34 ACA | Ssangyong