Mar 31, 2022

SC Holds That Erroneous Contract Interpretation by Arbitrator Should Not Lead to Setting Aside of Award if Interpretation is Reasonable

The SC in the case of Indian Oil Corporation Ltd. v. Shree Ganesh Petroleum[1] held that an erroneous interpretation of a contract by an arbitrator should not lead to setting aside of the award, where the interpretation is reasonable. The Court does not ordinarily interfere with interpretation made by the arbitral tribunal of a contractual provision only because another possible interpretation would have been a better one, unless such interpretation is patently unreasonable or perverse.


[1] Indian Oil Corpn. Ltd. v. Shree Ganesh Petroleum, 2022 SCC OnLine SC 131.




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