The Supreme Court has cautioned High Courts against interfering with well-reasoned awards passed by arbitrators. For, such awards are immune from challenge.

A Bench consisting of Justices R.V. Raveendran and H.L. Gokhale said: “The court, while considering the challenge to an arbitral award, does not sit in appeal on the findings and decision of the arbitrator.

“The umpire [arbitrator] is legitimately entitled to take the view which he holds to be the correct one after considering the material before him and interpreting the provisions of the agreement. If he does so, the decision of the umpire has to be accepted as final and binding.”

In the instant case, Sumitomo Heavy Industries Limited challenged a judgment of the Division Bench of the Bombay High Court affirming a single judge order setting aside an arbitration award on a petition filed by the Oil and Natural Gas Corporation (ONGC).

Perverse finding

Allowing the appeal, the Supreme Court said a perverse finding was one which was based on no evidence or one that no reasonable person would have arrived at.

“Unless it is found that some relevant evidence has not been considered or that certain inadmissible material has been taken into consideration the finding cannot be said to be perverse.”

In the present case, the umpire gave his findings and award after considering the material on record and giving due weightage to all terms of the contract in question.

Calling the same perverse was highly unfair to the umpire, the Bench said. It upheld the award and said there would be a decree in terms of the award.

Dismissed

The Bench dismissed the arbitration petition filed by the ONGC for setting aside the award.

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