Ssangyong Engineering & Construction Co. Ltd. v National Highways Authority of India (NHAI)
Rule established
Post-2015 Amendment, patent illegality does not include erroneous application of law or reappreciation of evidence; courts cannot act as appellate courts on facts under S.34
Facts
- Ssangyong (Korean company) had a construction contract with NHAI for a highway project
- Disputes arose over claims for additional costs, time extension, and damages
- The arbitral tribunal partially allowed Ssangyong's claims
- NHAI challenged the award under S.34, arguing patent illegality in the tribunal's interpretation of contract clauses and assessment of damages
- The question was: what constitutes "patent illegality" after the 2015 Amendment?
Issues
- What is the scope of "patent illegality appearing on the face of the award" under S.34 post the 2015 Amendment (Explanation 2)?
- Can a court reappreciate evidence or correct errors of fact under S.34?
- What constitutes "fundamental policy of Indian law" for S.34 purposes?
Held
- Patent illegality (post-2015) includes: (a) Contravention of substantive law of India (not mere erroneous application); (b) Contravention of the Arbitration Act itself; (c) Contravention of procedure agreed by parties.
- Patent illegality does NOT include: (a) Erroneous application of law; (b) Reappreciation of evidence; (c) A view that the court might not have taken.
- Fundamental policy of Indian law: Restricted to truly foundational principles (natural justice, binding nature of contract, principle against unjust enrichment). Does NOT mean every statutory provision.
- No appellate jurisdiction: Courts under S.34 cannot re-examine factual findings unless the approach is "so perverse that no reasonable person would have arrived at it."
Ratio Decidendi
Post the 2015 Amendment, S.34 review is narrow and non-appellate. Patent illegality must go to the root of the matter and appear on the face of the award itself. Mere disagreement with the tribunal's interpretation of facts or law is insufficient. The policy of minimal judicial intervention (S.5) demands restraint.
How to use it in an exam
- Part A: State: post-2015, patent illegality = contravention of substantive law/Act/procedure; does NOT = errors of law or evidence reappreciation. Cite Ssangyong.
- Part B: Use for comprehensive S.34 answers showing the narrow scope of judicial review. Compare with ONGC v Saw Pipes (pre-2015, wider) and show how 2015 Amendment + Ssangyong restricted the scope.
- Key line: "It is not open to the Court to reappreciate evidence. Even if the view of the arbitral tribunal on evidence is a possible view, the Court cannot interfere with the award."
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 power over evidence: courts cannot reappreciate S.19(3) evidence findings