Construction Of Contract's Terms Is Task Of Arbitrator, Cannot Be Interfered With U/S 34 Unless Construction Is Unreasonable: Madras HC

The Madras High Court bench of Justices M.Sundar And K.Govindarajan Thilakavadi affirmed that the construction of the terms of a contract is primarily for an Arbitrator to decide unless the Arbitrator construes the contract in such a way that it could be said to be something that no fair-minded or reasonable person could do then only interference under section 34 of the Arbitration Act is justified. Brief Facts This is an Appeal under Section 37 of the Arbitration and Conciliation Act, 1996, against the order dated 06.09.2021 passed by the learned Single Judge of this Court in O.P.No.903 of 2019, whereby the application preferred by the appellant herein under Section 34 of the Act for setting aside the award dated 06.08.2019 of the Sole Arbitrator was rejected. The award so made by the learned sole Arbitrator was challenged by the claimant under Section 34 of the 1996 Act before the Commercial Division. A vast variety of contentions urged on behalf of the parties were duly considered by the Court and the relevant points were answered in favour of the respondents and thereby, the award was upheld while rejecting the application under Section 34 Contentions The appellant submitted that the award passed by the sole Arbitrator dated 06.08.2019 as well as the impugned order dated 06.09.2021 rejecting the application under Section 34 of the Act in O.P.No.903 of 2019 suffers from patent illegality, thus it is liable to be set aside. Reliance was placed upon the decision of C.V.Enterprises Vs. Braithwaite & Co. Ltd.. Court's Analysis The court, at the outset, referred to the findings of the learned arbitrator wherein it was observed that the claimant with its eyes wide open having understood the terms and conditions of the contract under Ex.C.2 with its full implication on its enforcement and the financial impact to be suffered.