Court cannot substitute arbitral tribunal's view by supplanting its own: Madras High Court

A Division Bench of the Madras High Court recently expressed disapproval over "wanton tinkering with arbitral awards" by courts while reiterating that arbitration courts are expected to show restraint before interfering with arbitral awards (M/S.ENEXIO Power Cooling Solutions v. Gita Power and Infrastructure Pvt. Ltd and anr)..A Bench of Chief Justice Sanjib Banerjee and Justice PD Audikesavalu emphasised that a court exercising authority under Section 34 of the Arbitration and Conciliation Act, 1996 does not assume appellate authority.."Indeed, it has been the refrain in this jurisdiction over a century and more of jurisprudence that has developed that the court is loathe to correct any error since the parties had abandoned the sovereign forum of the court and had agreed to carry their disputes to a consensual forum. There is no doubt that the court exercises a degree of superintendence; but, ordinarily, errors of jurisdiction are corrected, rather than errors within jurisdiction," stated the judgment..If two possible views are possible, and the arbitration court favors one view over the other, it would not mean that the arbitration court has to substitute its view for the arbitral tribunal's alternate view, the Bench added. ."Once it is acknowledged that a possible view on the set of facts had been taken by the arbitral tribunal, that the other view appeals more to the court is of no relevance as the court cannot substitute the tribunal's view by supplanting its own", the Court said..A challenge to an arbitral award requires high tests to be met by the challenger, the Court explained further. An arbitration court's jurisdiction is more focused on whether the decision-making process of the arbitral tribunal was palpably erroneous, manifestly arbitrary or would cause a grave miscarriage of justice, it was reiterated.."An apparently erroneous view may not necessarily be corrected, nor will a flawed finding or a perceived mistaken interpretation excite the court unless there is something more to the matter," the Court opined..In the case at hand, the Court opined that the high tests for successfully challenging an arbitral award were not met by the challenger..Therefore, the Division Bench faulted the single-judge for having set aside the arbitral award by embarking on an independent exercise and "without reference to the award or attempting to ascertain whether the arbitral tribunal had applied its mind to the matters in issue."."The judgment and order impugned cover territories which a court in exercise of its limited authority under Section 34 of the Act should restrain itself from venturing into," the Court said..The case also prompted the Division Bench to comment that:"The flourishing export of litigation by this country may continue unabated till the penchant for wanton tinkering with arbitral awards is reined in. Despite instructive pronouncements in recent years beginning the Associate Builders case [(2015) 3 SCC 49], the narrow ambit of authority available in this jurisdiction, sometimes, appears to be beyond the comprehension of courts in receipt of challenges to arbitral awards." .With these observations, the Division Bench allowed the appeal before it and restored a 2020 arbitral award earlier set aside by the single-judge..Advocates R Parthasarathy, P Giridharan, and H Siddarth appeared for the appellant. Senior Advocate AR L Sundaresan and advocate Krishna Prasad represented one of the respondents. .[Read Judgment]