Legal provisions involved: Sections 34 and 37 of the Arbitration and Conciliation Act, 1996; Article 136 of the Constitution of India; Building and Other Construction Workers Act, 1996; Welfare Cess Act, 1996.

Judgement by: Supreme Court of India

Judge/Bench: Justice Sanjay Kumar and Justice Alok Aradhe

Facts

NHAI awarded construction contracts to various contractors across India. Later, NHAI deducted labour welfare cess from the contractors’ bills due to delayed implementation of labour laws. The contractors challenged this and went to arbitration, saying the cess was imposed after the contracts were signed and they should not bear the extra cost. The arbitral tribunals agreed with the contractors and ordered NHAI to refund the amount.

Key legal provisions

Sections 34 and 37 of the Arbitration and Conciliation Act, 1996

Article 136 of the Constitution of India

Building and Other Construction Workers Act, 1996

Welfare Cess Act, 1996.

Issues raised

Can courts re-examine facts or change the tribunal’s interpretation under Sections 34 and 37 of the Act?

Arguments of the case

NHAI argued that the tribunals wrongly applied the law and contract terms. The contractors said the tribunals took a reasonable view based on facts and the contract.

Judgement

The Supreme Court held that if the tribunal’s view is reasonable, courts cannot interfere just because another view is possible. NHAI’s appeals were dismissed.

Click here to VIEW the full judgement.