In Somdatt Builders – NCC – NEC (JV) vs. National Highways Authority of India & Ors. (Civil Appeal No. 2058/2012), the Supreme Court upheld the arbitral tribunal’s award, emphasizing minimal judicial interference under Section 34 of the Arbitration Act. It reiterated that courts do not act as appellate bodies and can only set aside an arbitral award if it is perverse, irrational, or against public policy. Errors in interpreting contractual terms fall within the arbitrator’s jurisdiction and are not grounds for interference, as reappreciation of evidence is not permitted. While an award can be set aside for patent illegality, such illegality must go to the root of the matter. The dispute involved price escalation and reimbursement of entry tax on cement, and the Court ruled in favor of restoring the arbitral award, reinforcing the pro-arbitration stance of Indian courts and the finality of arbitral decisions unless fundamental legal principles are violated.
