Supreme Court Holds That Appellate Courts Cannot Reinterpret Contracts or Interfere With Arbitral Awards Beyond the Narrow Scope of Sections 34 and 37 of the Arbitration Act

Case Name: Jan De Nul Dredging India Pvt. Ltd. v. Tuticorin Port Trust
Citation: 2026 INSC 34
Date of Judgment/Order: 07 January 2026
Bench: Justice Pamidighantam Sri Narasimha and Justice Pankaj Mithal

Held: The Supreme Court held that once an arbitral award has been upheld by a court under Section 34 of the Arbitration and Conciliation Act, 1996, an appellate court exercising jurisdiction under Section 37 cannot interfere by reinterpreting contractual clauses, reassessing evidence, or substituting its own view merely because another interpretation is possible, unless the award is patently illegal or contrary to the limited statutory grounds for interference.

Summary: The dispute arose out of a dredging contract executed between the appellant and the Tuticorin Port Trust, where the arbitral tribunal awarded compensation for idling charges of a Backhoe Dredger due to failure of the Port Trust to provide timely access to the site. While the arbitral award was upheld by the Single Judge of the Madras High Court under Section 34, the Division Bench interfered under Section 37 and deleted the awarded claim by reinterpreting contractual clauses relating to idle time compensation. The Supreme Court examined the arbitration framework, the contractual provisions, and settled jurisprudence on Sections 34 and 37, and found that the Division Bench had exceeded its jurisdiction by adopting an alternative interpretation of the contract and disturbing a plausible and reasoned arbitral view that had already survived Section 34 scrutiny.

Decision: The appeal was allowed, the judgment of the Division Bench of the Madras High Court dated 15.03.2021 was set aside, the arbitral award granting compensation for idle time charges was restored in full, and the Supreme Court reiterated that judicial interference in arbitration must remain strictly confined to the narrow limits prescribed under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996, with no order as to costs and all pending applications disposed of.