In Brief
A civil contractor claimed damages for delays and cost escalation in a construction project due to alleged failures by the state public works department in supplying drawings and materials. An arbitrator awarded approximately Rs. 14.68 lakhs. The lower court and High Court modified the award, reducing it to 25% of the tender amount (Rs. 3.71 lakhs), claiming the award was perverse and against public policy. The Supreme Court held that courts lack jurisdiction to modify arbitral awards—they can only set them aside if specific statutory grounds under Section 34 are met. Mere disagreement with the merits or burden on the exchequer does not justify modification. The Court restored the arbitrator's award and directed payment with 9% interest."
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