Associate Builders v Delhi Development Authority
Rule established
Courts cannot act as appellate courts under S.34; even if court disagrees with tribunal's factual findings, it cannot set aside unless the approach is perverse
Facts
- Associate Builders had a construction contract with DDA
- Disputes arose over claims for additional work, escalation costs, and damages
- The arbitral tribunal awarded substantial sums to Associate Builders
- DDA challenged the award under S.34, arguing the tribunal's findings were contrary to evidence and law
- The Single Judge set aside the award; the Division Bench restored it
Issues
- When can a court set aside an award on the ground that it is "in conflict with the public policy of India"?
- Can courts reappreciate evidence or substitute factual findings under S.34?
Held
- "Fundamental policy of Indian law" includes: Natural justice (audi alteram partem, nemo judex in causa sua); binding nature of contracts; justice, equity, and good conscience.
- Does NOT mean every statutory provision: Not every violation of law equals violation of fundamental policy. Only principles so foundational that their breach shocks the conscience.
- Cannot reappreciate evidence: Courts under S.34 have no power to examine whether the tribunal correctly appreciated evidence. Tribunal's factual findings are final.
- Perversity test: Interference with factual findings is possible ONLY if the finding is "so perverse or so irrational that no reasonable person would have arrived at it." This is a very high threshold.
Ratio Decidendi
S.34 does not create an appellate jurisdiction. Courts cannot reweigh evidence, substitute conclusions, or interfere with the tribunal's choice between two possible views. Only where the award is demonstrably perverse (no reasonable person could have reached that conclusion) can courts intervene on facts.
How to use it in an exam
- Part A: State: courts cannot act as appellate courts under S.34; only perversity warrants interference with facts. Cite Associate Builders.
- Part B: Use with Ssangyong (post-2015) for the comprehensive picture of S.34 scope. Associate Builders is the pre-2015 authority; Ssangyong confirms the same approach post-Amendment.
- Key line: "Even if the view of the arbitral tribunal on evidence is a possible view, the court cannot interfere. Only if the view is impossible or perverse can the court set aside."
Source
Source: Supreme Court judgment
This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.
Cited in study notes
ADRProceedings in Arbitral TribunalTribunal's evidence appreciation power: cannot be reappreciated by court