In Brief
The State of Chhattisgarh challenged an arbitral award directing refund of supervision charges deducted from payments made for supply of Sal seeds. The Supreme Court held that the arbitrator's failure to honour the express contractual terms mandating levy of such supervision charges constituted patent illegality under Section 28(3) of the Arbitration and Conciliation Act 1996. Despite the ground not being separately framed in the original petition under Section 34, the Court found that since it was raised in the Section 37 appeal and was manifest on the award's face, the High Court could have invoked Section 34(2-A) sua sponte to set aside the award. The Court partly allowed the appeal, quashing the award's direction to refund supervision charges as it directly violated the contract and relevant government circulars."}
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