DELHI HIGH COURT: INTERPRETATION OF CONTRACT PRIMARILY A MATTER FOR ARBITRATION TO DETERMINE, S OPE OF SECTION 34 ARBITRATION ACT

The Delhi High Court in the case Raghunath Builders Pvt.Ltd. v. Anant Raj Limited observed and has allowed restoration of an arbitral award, noting that it was not within the scope of the Single Judge under section 34 of Arbitration and Conciliation Act to re-interpret the contract between the parties and substitute the finding of the Arbitrator's despite it being plausible and well-reasoned.

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The court also referred to the case Ssangyong Engineering and Construction Co. Ltd. v. NHAI, wherein the court stated that the change that has been brought in by the Amendment Act, 2015 is that 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 and in short that the view of the arbitrator is not even a possible view to take.

Therefore, the court applied to the test laid down in Associate Builders v. DDA on the scope of interference under section 34 on the ground of public policy'.

The court in the case observed that the Arbitrator had given a plausible interpretation to the contract terms which was not against 'public policy' and did not shock the conscience of the court.