Delhi District Court
Mra Paper vs Acme Print O Pac And Anr on 8 January, 2026
IN THE COURT OF SH. AJAY PANDEY
DISTRICT JUDGE (COMMERCIAL COURT-10) CENTRAL,
TIS HAZARI COURTS, DELHI
OMP Comm 20/2024
MRA Paper
Khasra No.153, First Floor,
Theda, Manpura, Theda, Solan,
Himachal Pradesh - 174101
Through its Prop. Umesh Singh Petitioner/Objector
Vs
1. ACME Print O PAC,
Sh. Himanshu Arora,
Flat no. C-190, Building ACME Print O PAC,
Road/Street Naraina, Phase-I,
Naraina Industrial Area,
New Delhi-110028.
2. Sh. Vijay Singla, Arbitrator
Delhi Arbitration Centre,
37/8, Rajpur Road, Civil Lines,
Tis Hazari, Delhi-110054. Respondents
Date of Institution : 15.03.2024
Date of Arguments : 22.12.2025
Date of Judgment : 08.01.2026
JUDGMENT:-
PETITION/OBJECTIONS UNDER SECTION 34 OF THE ARBITRATION AND CONCILIATION ACT, 1996 AGAINST THE AWARD IN ARBITRATION CLAIM NO. MSME CASE/RED ID DL/01/M/NDC/00814 OF 2023 DATED 01.12.2023 PASSED BY THE SOLE ARBITRATOR I.E. RESPONDENT NO.2 WHEREBY AN AWARD OF RS.83,73,536/- PLUS TOTAL COST OF RS.1,91,715/- AND MRA PAPER VS ACME PRINT O PAC & ANR. Page no. 1 of 26 Digitally signed OMP Comm 20/2024 AJAY by AJAY PANDEY PANDEY Date: 2026.01.08 15:55:30 +0530 MSME INTEREST UPON THE AWARDED AMOUNT OF RS.83,73,536/- FROM THE DATE OF PASSING OF AWARD I.E. 01.12.2023 TILL ITS ACTUAL REALIZATION
1. The present objection under section 34 of The Arbitration and Conciliation Act 1996 (hereinafter referred as The Act), has been filed by petitioner challenging the award dated 01.12.2023 passed by learned Arbitrator.
2. Objections under section 34 of The Arbitration and Conciliation Act were presented before this court on 15.03.2024. Notice to the respondent/claimant was issued. Arbitration record was also called.
3. Respondent no.1 appeared through AR as well as through counsel but formal reply to the objection petition was not filed.
4. Arbitration record was deposited by learned Arbitrator.
5. Facts borne out from the Arbitration record are that the impugned award was passed under section 18 MSMED (Micro Small & Medium Enterprises Development) Act 2006 by a sole arbitrator appointed by Delhi Arbitration Center (DAC) by way of appointment letter dated 01.09.2023. Learned sole Arbitrator issued notice to both the parties i.e. to the objector and respondent no.1. Respondent no.1 filed its statement of claim on 16.09.2023. Objector did not file statement of defence, rather filed an application dated 22.09.2023 MRA PAPER VS ACME PRINT O PAC & ANR. Page no. 2 of 26 OMP Comm 20/2024 AJAY Digitally signed by AJAY PANDEY PANDEY Date: 2026.01.08 15:55:37 +0530 under section 16 of The Act, challenging jurisdiction of the Arbitral Tribunal and maintainability of arbitration proceedings. Said application was dismissed by learned Arbitral Tribunal vide detailed order.
6. However, after filing of the said application objector or his counsel stopped appearance before the learned Arbitrator and the objector was proceeded ex- parte and its right to file statement of defence was closed.
7. Claimant i.e. the respondent no.1 led the evidence before the learned Arbitrator and proved relevant documents including tax invoices, account statements, udyog Aadhar certificate of respondent no.1. After consideration of material and evidence, learned sole Arbitrator passed the impugned award in favour of respondent no.1 Micro Small & Medium Enterprise along with interest as per section 16 of MSMED Act 2006.
8. Brief facts material for adjudication of the present petition are stated in para no.2 of the petition as follows :-
a. Objector issued purchase order for FBB paper of quantity 150 ton, however respondent/claimant sent SBS paper. There is much difference in the price of FBB and SBS paper. Respondent no.1 also sent the paper of a different GSM then the ordered paper.
b. Objector had business dealing with MRA PAPER VS ACME PRINT O PAC & ANR. Digitally signed Page no. 3 of 26 OMP Comm 20/2024 AJAY by AJAY PANDEY PANDEY Date: 2026.01.08 15:55:44 +0530 respondent since 12.07.2019 and respondent no.1 supplied material worth Rs.1,01,00,000 to the objector, out of the said amount objector paid Rs.1,39,00,000/- to respondent no.1 with debit note of Rs.18.00 lakhs and the balance amount is Rs.31,88,000/-. Due to supply of sub-standard quality of goods by respondent no.1, one party of the objector i.e. M/s US Industries blocked Rs.30,00,000/- of the objector so the objector is not liable to pay any amount to respondent no.1.
c. Objector requested the respondent no.1 to lift back the sub-standard quality paper and respondent no.1 assured the objector to adjust the excess price and to lift back sub-standard quality paper, if the objector had not supplied said paper to its customers.
d. Believing upon the assurance of respondent no.1, objector supplied SBS papers to its customers but due to supply of sub-standard quality paper, customers of objector blocked his amount and he also lost image in the market.
e. Objector requested the respondent no.1 to adjust the excess amount which they have already received for FBB paper and also to lift back the sub- standard paper.
f. Respondent no.1 gave assurances to the objector to sit and adjust excess amount and to lift back sub-standard quality material but filed the dispute in the arbitration without any arbitration clause between the MRA PAPER VS ACME PRINT O PAC & ANR. Digitally signed Page no. 4 of 26 OMP Comm 20/2024 AJAY by AJAY PANDEY PANDEY Date: 2026.01.08 15:55:50 +0530 parties.
g. No agreement for arbitration exists between the parties.
h. Goods supplied by the claimant/respondent no.1 are of sub-standard quality and not as per the order placed by the objector. Such goods were rejected by customers of objector.
i. No dues of the respondent no.1 are pending and the objector has already paid excess amount to the claimant/respondent no.1.
j. Claim of the respondent no.1 was not maintainable under MSMED Act 2006.
9. After narration of these facts in para no.2 of the objection petition, following grounds to challenge the arbitration award are mentioned:-
A. Respondent no.1 sent SBS paper instead of ordered FBB paper.
B. Learned Arbitrator failed to appreciate that said papers were useless for the objector.
C. Learned Arbitrator failed to appreciate that respondent no.1 did not sent paper of required GSM.
D. Learned Arbitrator failed to appreciate that the objector paid the amount of Rs.1,39,00,000/- out of Rs.1,71,00,000/-.
E. Learned Arbitrator failed to appreciate that despite request of the objector and assurance of respondent no.1, respondent no.1 neither adjusted excess Page no. 5 of 26 Digitally signed MRA PAPER VS ACME PRINT O PAC & ANR. by AJAY OMP Comm 20/2024 AJAY PANDEY PANDEY Date:
2026.01.08 15:55:55 +0530 amount nor lifted back sub-standard quality of supplied papers.
F. Learned Arbitrator failed to appreciate that due to such acts of the respondent no.1, customers of objector blocked his amount and he also lost his image.
G. Learned Arbitrator failed to appreciate that respondent no.1 failed to comply his promises for adjusting the amount and lifting back sub-standard paper.
H. Learned Arbitrator failed to appreciate that instead of adjusting the amount and lifting back the paper, respondent no.1 filed the arbitration dispute.
I. Learned Arbitrator failed to appreciate that there was no arbitration agreement between the parties. Hence, arbitration proceedings were not maintainable.
J. Learned Arbitrator failed to appreciate that objector got done the work worth of Rs.10,00,000/- on the goods.
10. It is therefore stated that the award has resulted in miscarriage of justice and is based on assumptions/presumptions. It is further stated that errors and omissions in the award are apparent on the face of record and therefore the award is liable to be set-aside.
11. Arguments on petition were heard from learned counsel for petitioner. I have also gone through the material available on record. The court has carefully perused the award passed by Arbitral Tribunal.
12. It is argued by learned Sh. Pradeep Kumar Singh, MRA PAPER VS ACME PRINT O PAC & ANR. Page no. 6 of 26 Digitally signed OMP Comm 20/2024 AJAY by AJAY PANDEY PANDEY Date: 2026.01.08 15:56:01 +0530 Advocate for petitioner that the award passed by learned Arbitrator is against principals of natural justice. The learned Arbitrator was prejudiced against the petitioner/objector.
13. Arguments considered. Record perused.
14. It is settled law that the objections to the Arbitral Award are required to be strictly confined to the grounds under section 34 (2) and 2A of The Act.
15. Said provision is reproduced herein below:-
34.Application for setting aside arbitral award (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-
section (3).
(2) An arbitral award may be set aside by the Court only if--
2(a) the party making the application 1[establishes on the basis of the record of the arbitral tribunal that]--
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, underthe law for the time being in MRA PAPER VS ACME PRINT O PAC & ANR. Digitally signed Page no. 7 of 26 OMP Comm 20/2024 AJAY by AJAY PANDEY PANDEY Date: 2026.01.08 15:56:08 +0530 force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
(b) the Court finds that--
(i) the subject-matter of the dispute is not capable of settlement by arbitration MRA PAPER VS ACME PRINT O PAC & ANR. Digitally signed Page no. 8 of 26 OMP Comm 20/2024 AJAY by AJAY PANDEY PANDEY Date: 2026.01.08 15:56:15 +0530 under the law for the time being in force,or
(ii) the arbitral award is in conflict with the public policy of India.
[Explanation 1.--For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,--
(i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or
(ii) it is in contravention with the fundamental policy of Indian law; or
(iii) it is in conflict with the most basic notions of morality or justice.
Explanation 2.--For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.] [(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:
PROVIDED that an award shall not be MRA PAPER VS ACME PRINT O PAC & ANR. Digitally signed by Page no. 9 of 26 OMP Comm 20/2024 AJAY AJAY PANDEY PANDEY Date: 2026.01.08 15:56:20 +0530 set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.] ...........
16. There is only limited scope of interference by the court in the petitions under section 34 of the Arbitration and Conciliation Act 1996. In the case of Associate Builders Vs Delhi Development Authority (2015) 3 SCC 49, it was held by Hon'ble Supreme Court "the interference with an arbitral award is permissible only when the findings of the arbitrator are arbitrary, capricious or perverse or when conscience of the Court is shocked or when illegality is not trivial but goes to the root of the matter. It is held that once it is found that the arbitrator's approach is neither arbitrary nor capricious, no interference is called for on facts. The arbitrator is ultimately a master of the quantity and quality of evidence while drawing the arbitral award. Patent illegality must go to the root of the matter and cannot be of trivial nature."
17. In the case of Navodaya Mass Entertainment Ltd VS J.M. Combines MANU/SC/0735/2014, it was held :-
"scope of interference of the Court is very limited. Court would not be justified in reappraising the material on record and substituting its own view in place of the MRA PAPER VS ACME PRINT O PAC & ANR. Page no. 10 of 26 OMP Comm 20/2024 Digitally signed AJAY by AJAY PANDEY PANDEY Date: 2026.01.08 15:56:25 +0530 Arbitrator's view. Where there is an error apparent on the face of the record or the Arbitrator has not followed the statutory legal position, then and then only it would be justified in interfering with the award published by the Arbitrator. Once the Arbitrator has applied his mind to the matter before him, the Court cannot reappraise the matter as if it were an appeal and even if two views are possible, the view taken by the Arbitrator would prevail. (See: Bharat Coking Coal Ltd. Vs. L.K. Ahuja, (2004) 5 SCC 109; Ravindra & Associates Vs. Union of India, (2010) 1 SCC 80; Madnani Construction Corporation Private Limited Vs. Union of India & Ors., (2010) 1 SCC 549; Associated Construction Vs. Pawanhans Helicopters Limited, (2008) 16 SCC 128; and Satna Stone & Lime Company Ltd. Vs. Union of India & Anr., (2008) 14 SCC".
18. In the case of M/s Arosan Enterprises Ltd Vs Union of India & Anr MANU/SC/0595/1999, it was held:-
"that reappraisal of evidence by the court is not permissible and as a matter of fact exercise of power by the Court to reappraise the evidence is unknown to a proceeding under Section 30 of the Arbitration Act. In the event of there being no reasons in the award, question of interference of the court would not arise at all. In the event, however, there are reasons, the interference would still be not available MRA PAPER VS ACME PRINT O PAC & ANR. Page no. 11 of 26 OMP Comm 20/2024 Digitally signed by AJAY AJAY PANDEY PANDEY Date: 2026.01.08 15:56:30 +0530 within the jurisdiction of the Court unless of course, there exist a total perversity in the award or the judgment is based on a wrong proposition of law: In the event however two views are possible on a question of law as well, the Court would not be justified in interfering with the award. The common phraseology `error apparent on the face of the record' does not itself, however, mean and imply closer scrutiny of the merits of documents and materials on record: The court as a matter of fact, cannot substitute its evaluation and come to the conclusion that the arbitrator had acted contrary to the bargain between the parties. If the view of the arbitrator is a possible view the award or the reasoning contained therein cannot be examined. In this context, reference may be made to one of the recent decision of this Court in the case of State of Rajasthan v. Puri Construction Co. Ltd. (1994 (6) SCC
485) wherein this court relying upon the decision of Sudarsan Trading Co.'s case case (Sudarsan Trading Co. v. Government of Kerala and Anr. (1989 (2) SCC 38) observed in paragraph 31 of the Report as below:- "A court of competent jurisdiction has both right and duty to decide the lis presented before it for adjudication according to the best understanding of law and facts involved in the lis by the judge presiding over the court.
Such decision even if erroneous either in factual determination or application of law correctly, is a valid one and binding inter parties. It does not, therefore, stand to reason that the arbitrator's award will be per se invalid and inoperative for the simple reason that the arbitrator has failed to appreciate the facts and has committed error in appreciating correct legal principle in basing the award. MRA PAPER VS ACME PRINT O PAC & ANR. Page no. 12 of 26 OMP Comm 20/2024 Digitally signed AJAY by AJAY PANDEY PANDEY Date: 2026.01.08 15:56:36 +0530 An erroneous decision of a court of law is open to judicial review by way of appeal or revision in accordance with the provisions of law. Similarly, an award rendered by an arbitrator is open to challenge within the parameters of several provisions of the Arbitration Act. Since the arbitrator is a judge by choice of the parties and more often than not a person with little or no legal background, the adjudication of disputes by an arbitration by way of an award can be challenged only within the limited scope of several provisions of the Arbitration Act and the legislature in its wisdom has limited the scope and ambit of challenge to an award in the Arbitration Act. Over the decades, judicial decisions have indicated the parameters of such challenge consistent with the provisions of the Arbitration Act. By and large the courts have disfavoured interference with arbitration award on account of error of law and fact on the score of misappreciation and misreading of the materials on record and have shown definite inclination to preserve the award as far as possible. As reference to arbitration of disputes in commercial and other transactions involving substantial amount has increased in recent times, the courts were impelled to have fresh look on the ambit of challenge to an award by the arbitrator so that the award does not get undesirable immunity. In recent times, error in law and fact in basing an award has not been given the wide immunity as enjoyed earlier, by expanding the import and implication of "legal misconduct" of an arbitrator so that award by the arbitrator does not perpetrate gross miscarriage of justice and the same is not reduced to mockery of a fair decision of MRA PAPER VS ACME PRINT O PAC & ANR. Page no. 13 of 26 OMP Comm 20/2024 Digitally signed AJAY by AJAY PANDEY PANDEY Date: 2026.01.08 15:56:42 +0530 the lis between the parties to arbitration. Precisely for the aforesaid reasons, the erroneous application of law constituting the very basis of the award and improper and incorrect findings of fact, which without closer and intrinsic scrutiny, are demonstrable on the face of the materials on record, have been held, very rightly, as legal misconduct rendering the award as invalid. It is necessary, however, to put a note of caution that in the anxiety to render justice to the party to arbitration, the court should not reappraise the evidences intrinsically with a close scrutiny for finding out that the conclusion drawn from some facts, by the arbitrator is, according to the understanding of the court, erroneous. Such exercise of power which can be exercised by an appellate court with power to reverse the finding of fact, is alien to the scope and ambit of challenge of an award under the Arbitration Act. Where the error of finding of facts having a bearing on the award is patent and is easily demonstrable without the necessity of carefully weighing the various possible viewpoints, the interference with award based on erroneous finding of fact is permissible. Similarly, if an award is based by applying a principle of law which is patently erroneous, and but for such erroneous application of legal principle, the award could not have been made, such award is liable to be set aise by holding that there has been a legal misconduct on the part of the arbitrator. In ultimate analysis it is a question of delicate balancing between the permissible limit of error of law and fact and patently erroneous finding easily demonstrable from the materials on record and application of principle of law forming MRA PAPER VS ACME PRINT O PAC & ANR. Page no. 14 of 26 OMP Comm 20/2024 AJAY Digitally signed by AJAY PANDEY PANDEY Date: 2026.01.08 15:56:50 +0530 the basis of the award which is patently erroneous. It may be indicated here that however objectively the problem may be viewed, the subjective element inherent in the judge deciding the problem, is bound to creep in and influence the decision. By long training in the art of dispassionate analysis, such subjective element is, however, reduced to minimum. Keeping the aforesaid principle in mind, the challenge to the validity of the impugned award is to be considered with reference to judicial decisions on the subject."
19. It is thus clearly established by catena of judgments of Hon'ble Supreme Court and Hon'ble High Courts that the interference with an arbitral award is permissible only when the findings of the Arbitrator are arbitrary, capricious or perverse or when conscience of the court is shocked or when illegality is not trivial but goes to the root of the matter. The Arbitrator is master of the quality and quantity of the evidence. The court would not be justified in re-appraising the material on arbitral record and substitute its own view in place of the view of learned Arbitrator. Once the Arbitrator has applied his mind to the matter before him, the court cannot re- appraise the matter as if it was an appeal and even if two views are possible, the view taken by Arbitrator would prevail. No interference in the award is required unless there is existence of total perversity in the award or the judgment is passed on wrong proposition of law. Even MRA PAPER VS ACME PRINT O PAC & ANR. Digitally signed Page no. 15 of 26 OMP Comm 20/2024 by AJAY AJAY PANDEY PANDEY Date:
2026.01.08 15:56:56 +0530 when the Arbitrator makes a mistake either in law or in fact but such mistake does not appear on the face of award, the award is good not withstanding the mistake and would not be remitted or set-aside.
20. Further the court would not construe the nature of claim by adopting too technical an approach or by indulging into hair-splitting, otherwise the whole purpose behind holding the arbitration proceedings as an alternative to Civil Courts forum would stand defeated as was held by Apex Court in the case of Sangamner Bhag Sahakari Karkhana Ltd Vs Krupp Industries Ltd, AIR 2002 SC 2221. Further in the case of P.R. Shah, Shares & Stock Brokers Pvt Ltd Vs B.H.H. Securities Pvt Ltd & Ors, (2012) 1 SCC 594, it was held by Hon'ble Supreme Court that in order to provide the balance and to avoid excessive intervention, the arbitration award is not to be set-aside merely on the ground of erroneous application of law or by re-appreciating evidence.
21. In the case of NTPC Ltd Vs Maratho Electric Motors India Ltd, 2012 SCC Online Del 3995, it was held that appreciation of evidence by the Arbitrator is never a matter which the court considers in the proceedings under section 34 of The Act as the court is not sitting in appeal over the adjudication of the Arbitrator and the court do not act as court of appeal. An error relatable to interpretation of the contract by an Digitally signed MRA PAPER VS ACME PRINT O PAC & ANR. Page no. 16 of 26 OMP Comm 20/2024 AJAY by AJAY PANDEY PANDEY Date: 2026.01.08 15:57:02 +0530 Arbitrator is an error within his jurisdiction and such error is not amenable to the correction by courts as such error is not an error on the face of the award.
22. In the recent judgment of Delhi Airport Metro Express Pvt. Ltd Vs Delhi Metro Rail Corporation Ltd., Civil Appeal No. 5627 of 2021, AIR ONLINE 2021 SC 708, Hon'ble Apex Court, keeping in view the amendment of the Arbitration and Conciliation laws by the Arbitration & Conciliation Act 1996 decided the Contours of the court's power to review arbitral awards. Relevant principles can be summarized amongst others, as follows:-
- One of the principal objectives of the 1996 Act is to minimize the supervisory role of courts in the arbitral process.
- An application for setting aside an arbitral award can only be made in accordance with provisions of Section 34 of the 1996 Act.
- While deciding applications filed under Section 34 of The Act, courts are mandated to strictly act in accordance with and within the confines of Section 34, refraining from appreciation or re-appreciation of matters of fact as well as law.
- As it is only such arbitral awards that shock the conscience of the court that can be set aside on grounds under section 34.
MRA PAPER VS ACME PRINT O PAC & ANR. Page no. 17 of 26 OMP Comm 20/2024 Digitally signed AJAY by AJAY PANDEY PANDEY Date: 2026.01.08 15:57:07 +0530
- There must be patent illegality appearing on the face of the award, which refers to such illegality as goes to the root of the matter but which does not amount to mere erroneous application of the law.
- Reappreciation of evidence, which is what an appellate court is permitted to do, cannot be permitted under the ground of patent illegality appearing on the face of the award.
- The construction of the terms of a contract is primarily for an arbitrator to decide, unless the arbitrator construes the contract in a manner that no fair- minded or reasonable person would; in short, that the arbitrator's view is not even a possible view to take.
- A finding based on no evidence at all or an award which ignores vital evidence in arriving at its decision would be perverse and liable to be set aside on the ground of patent illegality.
- There is a disturbing tendency of courts setting aside arbitral awards, after dissecting and reassessing factual aspects of the cases. This approach would lead to corrosion of the object of the 1996 Act and the endeavours made to preserve this object, which is minimal judicial interference with arbitral awards. Several judicial pronouncements of the Court would become a dead letter if arbitral awards are set aside by categorising them as perverse or patently illegal without appreciating the contours of the said expressions. MRA PAPER VS ACME PRINT O PAC & ANR. Page no. 18 of 26 Digitally signed OMP Comm 20/2024 AJAY by AJAY PANDEY PANDEY Date: 2026.01.08 15:57:12 +0530
- Every error of law committed by the Arbitral Tribunal would not fall within the expression 'patent illegality'. In addition, contravention of law not linked to public policy or public interest is beyond the scope of the expression 'patent illegality'.
- Courts do not sit in appeal against the arbitral award. The permissible grounds for interference with a domestic award under Section 34(2-A) on the ground of patent illegality is when the arbitrator takes a view which is not even a possible one.
23. In Indian Oil Corporation Vs Shree Ganesh Petroleum Rajgurunagar, MANU/SC/0127/2022, it was held by Hon'ble Supreme Court :-
44. An Arbitral Tribunal being a creature of contract, is bound to act in terms of the contract under which it is constituted. An award can be said to be patently illegal where the Arbitral Tribunal has failed to act in terms of the contract or has ignored the specific terms of a contract.
45. However, a distinction has to be drawn between failure to act in terms of a contract and an erroneous interpretation of the terms of a contract. An Arbitral Tribunal is entitled to interpret the terms and conditions of a contract, while adjudicating a dispute. An error in interpretation of a contract in a case where there is valid and lawful submission of arbitral disputes to an MRA PAPER VS ACME PRINT O PAC & ANR. Page no. 19 of 26 OMP Comm 20/2024 Digitally signed AJAY by AJAY PANDEY PANDEY Date: 2026.01.08 15:57:18 +0530 Arbitral Tribunal is an error within jurisdiction.
46. The Court does not sit in appeal over the award made by an Arbitral Tribunal. The Court does not ordinarily interfere with interpretation made by the Arbitral Tribunal of a contractual provision, unless such interpretation is patently unreasonable or perverse.
Where a contractual provision is ambiguous or is capable of being interpreted in more ways than one, the Court cannot interfere with the arbitral award, only because the Court is of the opinion that another possible interpretation would have been a better one.
47. In Associate Builders (supra), this Court held that an award ignoring the terms of a contract would not be in public interest. In the instant case, the award in respect of the lease rent and the lease term is in patent disregard of the terms and conditions of the lease agreement and thus against public policy. Furthermore, in Associate Builders (supra) the jurisdiction of the Arbitral Tribunal to adjudicate a dispute itself was not in issue. The Court was dealing with the circumstances in which a Court could look into the merits of an award.
48. In this case, as observed above, the impugned award insofar as it pertains to lease rent and lease period is patently beyond the scope of the competence of the Arbitrator appointed in terms of the dealership agreement by the Director (Marketing) of the Appellant. agreement and thus against public policy. Furthermore, MRA PAPER VS ACME PRINT O PAC & ANR. Page no. 20 of 26 OMP Comm 20/2024 Digitally signed by AJAY AJAY PANDEY PANDEY Date: 2026.01.08 15:57:24 +0530 in Associate Builders (supra) the jurisdiction of the Arbitral Tribunal to adjudicate a dispute itself was not in issue. The Court was dealing with the circumstances in which a Court could look into the merits of an award.
48. In this case, as observed above, the impugned award insofar as it pertains to lease rent and lease period is patently beyond the scope of the competence of the Arbitrator appointed in terms of the dealership agreement by the Director (Marketing) of the Appellant.
49. The lease agreement which was in force for a period of 29 years with effect from 15th April, 2005 specifically provided for monthly lease rent of Rs.1750 per month for the said plot of land on which the retail outlet had been set up. It is well settled that an Arbitral Tribunal, or for that matter, the Court cannot alter the terms and conditions of a valid contract executed between the parties with their eyes open.
24. In Civil Appeal No. 369-3700 of 2018 decided on 28.07.2021, it was held :-
"85. It has been held that the role of the Arbitrator is to arbitrate within the terms of the contract. He has no power apart from what the parties have given him under the contract. If he has travelled beyond the contract, he would be acting without jurisdiction.
86. It will also be apposite to refer to the following observations of this Court in the case of Md. Army Welfare Housing Organization v. Sumangal MRA PAPER VS ACME PRINT O PAC & ANR. Page no. 21 of 26 OMP Comm 20/2024 Digitally signed AJAY by AJAY PANDEY PANDEY Date: 2026.01.08 15:57:59 +0530 Services (P) Ltd. MANU/SC/0797/2003 "43. An Arbitral Tribunal is not a court of law. Its orders are not judicial orders. Its functions are not judicial functions. It cannot exercise its power ex debito justitiae. The jurisdiction of the arbitrator being confined to the four corners of the agreement, he can only pass such an order which may be the subject-matter of reference."
87. It has been held that an Arbitral Tribunal is not a Court of law. Its orders are not judicial orders. Its functions are not judicial functions. It cannot exercise its powers ex debito justitiae. It has been held that the jurisdiction of the arbitrator being confined to the four corners of the agreement, he can only pass such an order which may be the subject-matter of reference.
88. In that view of the matter, we are of the considered view, that the impugned Award would come under the realm of 'patent illegality' and therefore, has been rightly set aside by the High Court."
25. Now coming back to the facts of the present case, the objector was proceeded ex-parte and its right to file statement of defence was closed. Claimant i.e. the respondent no.1 led the evidence before the learned Arbitrator and proved relevant documents including tax invoices, account statements, udyog Aadhar certificate of respondent no.1. After consideration of material and evidence, learned sole Arbitrator passed the impugned MRA PAPER VS ACME PRINT O PAC & ANR. Page no. 22 of 26 OMP Comm 20/2024 Digitally signed AJAY by AJAY PANDEY PANDEY Date: 2026.01.08 15:58:04 +0530 award in favour of respondent no.1 Micro Small & Medium Enterprise along with interest as per section 16 of MSMED Act 2006.
26. In the case of McDermott International Inc. v. Burn Standard Co. Ltd. (2006) 11 SCC 181, it was held that interpreting the terms of a contract, even when it involves legal questions, is a matter for the arbitrator to decide. Relevant paragraphs of the judgment are extracted as under:
"112. It is trite that the terms of the contract can be express or implied. The conduct of the parties would also be a relevant factor in the matter of construction of a contract. The construction of the contract agreement is within the jurisdiction of the arbitrators having regard to the wide nature, scope and ambit of the arbitration agreement and they cannot be said to have misdirected themselves in passing the award by taking into consideration the conduct of the parties. It is also trite that correspondences exchanged by the parties are required to be taken into consideration for the purpose of construction of a contract. Interpretation of a contract is a matter for the arbitrator to determine, even if it gives rise to determination of a question of law.
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113. Once, thus, it is held that the arbitrator had the jurisdiction, no further question shall be raised and the court will not exercise its jurisdiction unless it is found that there exists any bar on the face of the award."
(emphasis added).
27. In the case of Associate Builders v. Delhi Development Authority (2015) 3 SCC 49, Hon'ble Supreme Court held that the interference under Section 34 is limited and extremely circumscribed and is permissible only when the award is tainted by patent illegality, i.e. illegality going to the root, and not mere erroneous application of law. In the case of Ssangyong Engineering & Construction Co. Ltd. v. National Highways Authority of India (2019) 15 SCC 131, the Hon'ble Supreme Court narrowed the scope of "public policy" under Section 34, observing that it is confined to cases where the award is in conflict with the fundamental policy of Indian law, is patently illegal, or is in conflict with most basic notions of morality or justice. Moreover, in the case of MMTC Ltd. v. Vedanta Ltd. (2019) 4 SCC 163, the Hon'ble Supreme Court reiterated that Section 34 is not a provision for appeal, and Courts cannot reappreciate evidence or substitute their view for that of the arbitrator. Interference is permissible only on the limited grounds specified in the Act MRA PAPER VS ACME PRINT O PAC & ANR. Page no. 24 of 26 OMP Comm 20/2024 Digitally signed AJAY by AJAY PANDEY PANDEY Date: 2026.01.08 15:58:43 +0530
28. Court is not supposed to re-appreicate the evidence led before the learned Arbitrator. Even if two views are possible, the court cannot substitute its own view in preference to the view taken by learned Arbitrator.
29. No ground as required under section 34 (2) of The Arbitration and Conciliation Act is made out calling for any interference in the award dated 01.12.2023.
30. It has been held of catena of judgments that learned Arbitrator is master of facts and evidence led before him. In the present case the objector had chosen to become ex-parte. No statement of defence was filed before the learned Arbitrator. No evidence was led. Learned Arbitrator has given his detailed findings about his jurisdiction, applicability of MSMED Act and has analysed relevant provisions of the said Act in light of the judgments of Hon'ble Supreme Court and Hon'ble High Court. All the issues raised in the present objection petition are factual. Objector was supposed to plead and prove these issues before the learned Arbitral Tribunal. Learned Arbitrator has rightly held that there is provision of statutory arbitration under MSMED Act. Detailed order dated 27.09.2023, through which the application dated 22.09.2023 was disposed off is available on arbitration file.
31. Neither the court see any error apparent on the face of record nor any such error is pointed out in the MRA PAPER VS ACME PRINT O PAC & ANR. Digitally signed Page no. 25 of 26 OMP Comm 20/2024 by AJAY AJAY PANDEY PANDEY Date:
2026.01.08 15:58:49 +0530 entire objection petition. Apart from the factual allegations, all legal objections are vague and unsubstantiated. The present objection petition is not covered within the limited scope of section 34 of The Act.
32. Objection petition is accordingly dismissed.
33. Petition under section 34 of The Arbitration & Conciliation Act as well as application under section 36 (2 & 3) for stay of operation of impugned award are accordingly dismissed.
34. File be consigned to record room after due compliance.
Digitally signedAnnounced in the open court AJAY by AJAY PANDEY on the 08th day of January, 2026 PANDEY Date: 2026.01.08 15:58:59 +0530 (Ajay Pandey) District Judge (Commercial Court-10) Central, Tis Hazari Courts, Delhi.
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