Calcutta High Court reaffirms that arbitral awards based on reasoned application of contract terms—particularly where both parties breach notice and cure procedures—are not amenable to Section 34 challenge merely because alternative interpretations exist. Upholds established Supreme Court precedent restricting judicial review to grounds enumerated in Section 34, thus providing clear binding authority on deference to arbitral findings in commercial disputes.
Summary
| Category | Data |
|---|---|
| Case Name | AP-COM/709/2024 of MANIS DEVELOPMENT MANAGEMENT Vs RISHINOX BUILDWELL LLP AND ORS |
| CNR | WBCHCO0052892023 |
| Date of Registration | 19-10-2023 |
| Decision Date | 31-10-2025 |
| Disposal Nature | DISMISSED |
| Judgment Author | HON’BLE JUSTICE SUGATO MAJUMDAR |
| Court | Calcutta High Court |
| Bench | Single Judge: Sugato Majumdar, J. |
| Precedent Value | Binding on subordinate courts within jurisdiction; persuasive for other High Courts |
| Overrules / Affirms | Affirms existing Supreme Court precedent on Section 34 scope and arbitral finality (Som Datt Builders, Dyna Technologies, Indian Oil Corp., Associate Builders, Ssangyong, UHL Power) |
| Type of Law | Arbitration Law (Section 34, Arbitration and Conciliation Act, 1996); Contract and Specific Relief Acts |
| Questions of Law |
|
| Ratio Decidendi | The court held that where the arbitral tribunal rejects both claims and counterclaims for want of compliance with contractual notice-and-cure prerequisites—and does so with reference to and reasonable interpretation of contract terms—the award cannot be set aside merely because alternative readings are possible. Judicial review under Section 34 is strictly limited to enumerated grounds and does not permit re-evaluation of evidence or alternate construction of contract if the arbitrator’s reasoning is properly based in the record. Mere error in application of law or facts, or different plausible interpretations, are not grounds to set aside such awards. The tribunal, as the master of evidence and interpretation (unless reasoning is perverse or no reasonable person could reach it), must be deferred to. |
| Judgments Relied Upon | Indian Oil Corporation Ltd. v. Shree Ganesh Petroleum Rajgurunagar (2022) 4 SCC 463; Som Datt Builders Ltd. v. State of Kerala (2009) 10 SCC 259; Dyna Technologies Pvt. Ltd. v. Crompton Greaves Ltd. (2019) 20 SCC 1; Associate Builders v. DDA (2015) 3 SCC 49; Ssangyong Engg. & Construction Co. Ltd. v. NHAI (2019) 15 SCC 131; UHL Power Company Ltd. v. State of Himachal Pradesh (2022) 4 SCC 116; Parsa Kente Collieries Ltd. v. Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (2019) 7 SCC 236; Punjab State Civil Supplies Corp. Ltd. v. Sanman Rice Mills (2014 SCC OnLine SC 2632); OPG Power Generation Pvt. Ltd. v. Enexio Power Cooling Solutions India Pvt. Ltd. (2025) 2 SCC 417; I.S. Sikander v. K. Subrakani (2013) 15 SCC 27; Gujarat Bottling Co. Ltd. v. Coca Cola Co. (1995) 5 SCC 545; Oil and Natural Gas Corporation v. Saw Pipes Ltd. (2003) 5 SCC 705; R. Kandaswamy v. T.R.K. Sarawathy (2025) 3 SCC 513 |
| Logic / Jurisprudence / Authorities Relied Upon by the Court | The decision relies on established jurisprudence that Section 34 does not permit reappreciation of factual matters or alternate constructions of contract, but only interference for patent illegality, perversity, or violation of public policy. Arbitral tribunals’ application of contractual notice-and-cure provisions are largely immune from judicial correction unless the reasoning is absolutely unreasonable, perverse, or outside the contract. Arbitral tribunal’s failure to give elaborate reasons may be cured where the reasoning is adequate and intelligible. |
| Facts as Summarised by the Court | Both parties entered a Development Management Agreement (DMA) concerning residential development. Various disputes, including allegations of breach of contractual milestones and requirements for notice and remediation, arose. Rishinox terminated the DMA, alleging repeated failures by Mani’s; Mani’s contended that Rishinox was seeking to wriggle out. Arbitral proceedings dismissed both claims and counter-claims owing to failure to comply with contractual preconditions (three-curative-notice procedure in clause 18). Both parties challenged the award under Section 34; the present judgment upholds the award, holding both parties were in breach and the tribunal’s decision was reasonable and within the contract. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts within Calcutta High Court’s jurisdiction; Commercial Division under Calcutta High Court |
| Persuasive For | Other High Courts, Commercial Courts, and arbitral tribunals interpreting Section 34, Arbitration and Conciliation Act |
| Follows | Indian Oil Corporation Ltd. v. Shree Ganesh Petroleum Rajgurunagar (2022), Som Datt Builders Ltd. v. State of Kerala (2009), Dyna Technologies (2019), Associate Builders (2015), Ssangyong (2019), UHL Power (2022) |
What’s New / What Lawyers Should Note
- Reaffirms that Section 34 jurisdiction does not allow courts to re-assess alternatives or substitute contractual interpretations where the tribunal’s findings are reasoned and based on contract.
- Dismissal of claims/counter-claims for non-compliance with curative notice clauses in contracts cannot be challenged merely due to availability of another plausible reading.
- The “reasoned award” mandate under Section 31(3) does not require an elaborate judgment if the reasoning is proper, intelligible, and adequate.
- Both parties’ breaches of contractual preconditions (notice/curing opportunities) justify the tribunal’s refusal to examine their factual quarrels on merits.
- Counsel should focus Section 34 challenges on procedural infractions, patent illegality, or perversity—not on differing views of facts or contract construction.
Summary of Legal Reasoning
- The tribunal dismissed both claim and counter-claim because neither party complied with the three-stage notice-and-cure procedure in clause 18 of the DMA before resorting to termination or counter-claims.
- The Calcutta High Court held that Section 34 does not permit interference merely because alternative interpretations or outcomes are possible, as long as the arbitral award is reasoned and based on contract terms.
- The court drew on Supreme Court authority (Som Datt Builders, Dyna Technologies, Associate Builders, Ssangyong, UHL Power), emphasizing that errors of law, improper or alternative factual interpretations, or inadequacy of reasoning (short of palpable unreasonableness or perversity) do not warrant judicial intervention.
- The court reviewed the wording and scheme of clause 18, holding the tribunal’s application was within the legal and contractual framework.
- The court further found that the arbitral reasoning was adequate under Section 31(3) and rejected attempts to challenge the award for lack of sufficient elaboration.
- The judgment clarified that tribunal mastery over contract interpretation must be respected if conclusions are not so irrational that no reasonable person could reach them, even where the court may have reached a different view.
- The applications, seeking (a) to challenge tribunal rejection of Rishinox’s claim, and (b) to overturn dismissal of Mani’s counterclaim, were both dismissed.
Arguments by the Parties
Petitioner (Mani’s Development Management LLP):
- The emails relied on by Rishinox only showed negotiation for an addendum, not abandonment or repudiation.
- Section 39 of the Indian Contract Act does not override the express requirement of notice-and-cure in clause 18 of the DMA.
- Rishinox failed to follow the three-tier notice procedure before termination; the termination was thus invalid.
- The arbitral tribunal should not have dismissed Mani’s counter-claim since the DMA was still subsisting, Mani’s was ready and willing to perform, and no opportunity was given to cure alleged breaches.
- The tribunal failed to provide adequate reasons for the dismissal of the counter-claim, violating Section 31(3) of the Arbitration Act.
- The award is patently illegal and against public policy, meriting intervention under Section 34(2)(b)(ii).
- Reliefs under Specific Relief Act and for damages were improperly denied.
Respondent (Rishinox Buildwell LLP):
- The scope of Section 34 challenge is limited to the grounds enumerated in the section; courts cannot re-evaluate facts or act as appellate forums.
- The arbitral tribunal’s view was plausible and reasonable, as measured by contract and law.
- Mani’s had no claim for specific performance; the counter-claim was mainly for damages and injunction, which could not be granted due to Mani’s own failure to comply with contractual terms.
- Clauses under the Specific Relief Act were inapplicable (referenced Gujarat Bottling Co. and other Supreme Court authorities).
- Awards cannot be disturbed for mere errors of law or fact or for plausible alternative readings—Section 34 does not permit such interference.
Factual Background
The dispute arose from a Development Management Agreement (DMA) between Rishinox Buildwell LLP (landowner/developer) and Mani’s Development Management LLP (development manager) regarding a residential project in Kolkata. Rishinox alleged that Mani’s failed to deliver business plans and did not fulfill key milestones, despite repeated notices, leading Rishinox to terminate the DMA and claim damages. Mani’s contested this, asserting that Rishinox tried to wriggle out of the contract and that discussions over amendments were ongoing. On both sides, claims and counter-claims were dismissed by the arbitral tribunal for failure to comply with contractually-required curative notice procedures under clause 18 prior to asserting breach/termination. Both parties initiated Section 34 petitions challenging the award, resulting in the present judgment.
Statutory Analysis
- Section 34, Arbitration and Conciliation Act, 1996: Court’s power to set aside arbitral awards confined to limited, enumerated grounds (e.g., incapacity, improper procedure, violation of public policy, patent illegality). Does not permit merits review or alternate fact finding.
- Section 31(3), Arbitration and Conciliation Act, 1996: Mandates reasons for arbitral awards; satisfied by proper, intelligible, and adequate reasoning.
- Clauses 18.1.1 & 18.1.2, Development Management Agreement: Mandatory three-notice-and-cure process (with timelines) as precondition to termination and remedies, for both parties.
- Section 39, Indian Contract Act, 1872: Addresses repudiation, but party-specific notice and cure requirements in contract override general principles.
- Specific Relief Act, 1963 (Sections 32, 38, 40, 42): Discussed in context of damages and injunctive relief, but denied owing to party’s non-performance and non-compliance with contractual terms.
Dissenting / Concurring Opinion Summary
No dissenting or concurring opinion indicated in the judgment.
Procedural Innovations
No new procedural rule or innovation was set by the judgment.
Alert Indicators
- ✔ Precedent Followed – Existing Supreme Court and High Court case law on Section 34 scrutiny and arbitral finality affirmed.
- No breaking precedent, split verdict, or conflicting decisions found.