UNION OF INDIA Vs STERLITE TECHNOLOGIES LIMITED

O.M.P. (COMM) 395/2023 Page 1 of 22

* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Judgment reserved on: 27.07.2026

Judgment pronounced on: 12.08.2026

+ O.M.P. (COMM) 395/2023

UNION OF INDIA, THROUHG SECRETARY,

DEPARTMENT OF TELECOMUNICATIONS, MINISTRY

OF COMMUNICATIONS, GOVT. OF INDIA .....Petitioner

Through: Mr. Ruchir Mishra, Mr. Sanjiv

Kumar Saxena, Mr. Mukesh

Kumar Tiwari, Ms. Reba Jena

Mishra & Ms. Poonam Shukla,

Advs.

versus

STERLITE TECHNOLOGIES LIMITED .....Respondent

Through: Mr. Amit Dhingra, Mr. Rohit

Mahajan, Mr. Siddharth

Agrawal & Ms. Kesang T

Doma, Advs.

CORAM:

HON'BLE MR. JUSTICE AVNEESH JHINGAN

J U D G M E N T

1. This petition is filed under Section 34 of the Arbitration and

Conciliation Act, 1996 (for short 'the Act') challenging the arbitral

award dated 17.05.2023 (for brevity 'the award').

2. The respondent engaged in designing and integrating digital

networks and providing technological solutions for fixed and wireless

communication networks was granted Infrastructure Providers

O.M.P. (COMM) 395/2023 Page 2 of 22

Category - I (for short „IP-I‟) Registration Certificate No.348/2010

(hereinafter referred to as „RC‟) by the petitioner/Department of

Telecommunications (DOT), permitting the respondent to provide

passive telecom infrastructure.

2.1 The case set up is that the respondent through its wholly owned

subsidiary, Sterlite Networks Limited later renamed as Speedon

Network Limited („SNL‟), entered into a Master Service Agreement

(for short „MSA‟) dated 20.01.2012 with a Telecom Service Provider

(TSP)-Citycom Networks Private Limited (for short „Citycom‟) for

providing „access infrastructure‟. Another similar MSA was executed

by the respondent with Microscan Computers Private Limited (for

short „MCPL‟) on 25.05.2012. The payment structure under the

MSAs, was based on subscriber base and revenue sharing rather than

lease rentals for passive infrastructure. It was alleged that the

respondent was functioning as a TSP without possessing the requisite

licence. The MSAs were signed with five TSPs but for the case at

hand only the aforesaid two are relevant.

2.2 On 26.02.2015 the petitioner carried out an inspection of the

respondent telecom premise at Pune. The Inspection Report dated

12.08.2015 concluded that: (i) the respondent beyond the scope of IP-I

RC was selling bandwidth; (ii) the respondent managed and operated

overall equipments through its wholly owned subsidiary-SNL; and

(iii) the respondent by providing unauthorised service evaded

O.M.P. (COMM) 395/2023 Page 3 of 22

Government revenue of more than Rs.2.5 crores towards National

Long Distance License (NLD) entry and annual license fee.

2.3 The inspection was followed by exchange of correspondence

with the respondent seeking details regarding ownership of active

telecom equipment installed at the premises of the respondent. By

reply dated 20.03.2015 the respondent furnished the details of the

owners of network equipment, MSAs executed and other technical

clarification. The details of active equipment sought by the petitioner

vide email dated 27.03.2015 were furnished by the respondent by

email dated 13.04.2015. The details were given of TSP for whom

equipments were installed at the premises.

2.4 An email dated 22.04.2015 was sent by the petitioner, seeking

confirmation from the respondent with respect to inference drawn by

the petitioner that respondent owns only the identified equipments and

all other equipments installed belong to the TSPs. The respondent by

email dated 27.04.2015 stated that the inferences drawn by the

petitioner are correct.

2.5 After three years of the inspection the petitioner issued a show

cause notice (for short „SCN‟) dated 30.07.2018 citing violation of the

terms of the IP-I RC. A reply dated 08.10.2018 was filed by the

respondent. The demand notice dated 24.08.2020 was issued by the

petitioner for an amount of Rs.8,55,75,236/-. The details of calculation

of demand sought by the respondent vide email dated 26.08.2020 were

O.M.P. (COMM) 395/2023 Page 4 of 22

provided by petitioner by email dated 28.08.2020. The request dated

08.09.2020 of the respondent to reconsider the demand was rejected

by the petitioner by letter dated 21.10.2020 and the respondent was

directed to deposit Rs.8,55,75,236/-.

2.6 An application under Section 9 of the Act was filed by the

respondent seeking restraint on the demand notice. Clause 5.0 of the

IP-I RC provided for dispute resolution through arbitration. By notice

dated 07.01.2021 the respondent invoked arbitration. A sole arbitrator

was appointed by this Court vide order dated 23.04.2021.

2.7 Before the arbitrator the respondent challenged the legality of

the demand notice contending inter alia, that the 2009 clarification

authorised IP-I registrants to establish active infrastructure and that the

active equipment was not owned by the respondent. The petitioner on

the other hand maintained that the respondent rendered end-to-end

bandwidth services despite not being a licensed TSP and caused

substantial loss of Government revenue.

2.8 The impugned award held the demand notice and letter dated

21.10.2010 to be illegal, arbitrary, irrational and unjustified. Hence,

the present petition.

3. Learned counsel for the petitioner submits that arbitrator

ignored the letter dated 06.06.2015 wherein SNL admitted that the

equipment belonged to the respondent and this admissions by SNL

binds the respondent. Contention is that neither entity at the relevant

O.M.P. (COMM) 395/2023 Page 5 of 22

time possessed the requisite licence to own or operate the equipment.

The award is stated to be contradictory as ownership of the equipment

is attributed to SNL at one place and to the TSP at another. It is

submitted that the arbitrator treated the respondent and SNL as

separate entities for setting aside demand notice but at the same time

while adjudicating the demand treated these to be one entity and

considered the application made by SNL for unified license.

3.1 The contention is that the respondent was licensed to establish

passive infrastructure and not active infrastructure. The billing under

the MSAs was based on bandwidth utilization, not on dark fiber

infrastructure and this proved that the respondent provided end-to-end

bandwidth service. It is contended that the arbitrator failed to

appreciate the terms of the MSAs and the billing arrangement between

the respondent, SNL and TSPs. The submission is that the SNL acted

as a facade and in fact the respondent was the actual beneficiary and

was providing end-to-end service.

3.2 Reliance is on the letter dated 22.08.2020, to contend that the

respondent undertook to pay the demanded amount.

3.3 The plea is that the arbitrator erred in holding that damages

were not recoverable in the absence of an express provision in the IP-I

RC. Contention is that seeking damages for violating term of RC is an

inherent right and not dependent upon clause of the contract.

4. Per contra, the equipment belonged to SNL and was leased to

O.M.P. (COMM) 395/2023 Page 6 of 22

TSP. There was no evidence to prove that the respondent owned the

equipment or provided end-to-end bandwidth service. The arbitrator

rightly held that the billing was not based on bandwidth utilization.

4.1 The submission is that the award duly records that the

broadband services/sale of bandwidth was being provided by Citycom

and not the respondent. Clause 6.6 of the MSA dated 20.01.2012 is

relied upon to contend that the SNL was responsible only for passive

infrastructure and active equipment was provided by Citycom. It is

submitted that clauses of the MSA dated 20.01.2012 were amended

vide novation agreement dated 02.04.2012 wherein the term „access

infrastructure‟ was substituted by „passive infrastructure‟. Reliance is

on the decision of the Supreme Court in Vodafone International

Holdings B.V vs. Union of India & Ors. 2012 9 SCC 407 to

emphasize that a holding company and subsidiary company are

separate legal entities.

4.2 The argument is that a pan-India demand could not be raised

based on inspection at Pune.

4.3 Further that damages under Section 73 of the Indian Contract

Act, 1873 (for short „the Contract Act‟) cannot be claimed for

violation of terms and conditions of IP-I RC.

5. In rebuttal learned counsel for the petitioner submits that clause

8 of the MSA dated 20.01.2012 expressly refers to an alliance partner,

while Annexure-I thereof records that the respondent was responsible

O.M.P. (COMM) 395/2023 Page 7 of 22

for handling internet broadband services for TSP.

6. Heard the learned counsel for the parties at length and perused

the record with their able assistance. Albeit, written submissions were

filed but learned counsel for the parties pressed no other contentions

than those argued are to be pressed.

7. Before proceeding further, it would be relevant to quote the

following clauses of the MSAs:

7.1 The relevant clauses of the MSA dated 20.01.2012 executed between

SNL and Citycom read as under:-

6. CONNECTIVITY ANO NETWORK SAFETY

“6.1. SNL shall install, operate and maintain the

Access Infrastructure and Citycom Equipment at

various Projects and subject to all reasonable support

from Citycom; SNL shall be responsible to manage

the same.

6.2. Citycom shall be responsible for providing

Citycom Backhaul Equipment at Area Access Nodes

relating to the Projects, as stated in the PAF and

shall also be responsible to Install, establish, operate,

maintain the Citycom Backhaul Equipment and

bring its backhaul capacity up to the Area Access

Nodes in each Cluster at its own cost including the

necessary facilities or equipments required to enable

the capacity for providing service to its subscribers,

as specified in this Agreement. Citycom and SNL

shall connect their networks at the Area Access

Nodes relating to the Projects, as stated In the PAF.

6.3. Citycom to provide a free of cost 2 Mbps

internet broadband line at each Area Access Node

O.M.P. (COMM) 395/2023 Page 8 of 22

for managing the OLT with one (01) IP. However on

a case to case basis if more than one IP address is

required the same shall be provided by Citycom.

6.6. SNL shall be responsible for maintenance and

safe operation of Citycom Equipments, Access

Infrastructure and associated facilities at its own

expense, and will also be responsible for ensuring

that the use of the equipments and associated

facilities comply with all applicable laws, rules and

regulations and does not endanger the safety or

health of employees, contractors, agents or

customers of Citycom.

8. ALLIANCE PARTNER

8.1. Citycom shall be the Alliance Partner of SNL

for providing Citycom Services as mentioned in

Annexure 1, by using the Access Infrastructure for

various existing as well as future Projects, during the

currency of this Agreement subject to respective

PAF sign-off.

ANNEXURE -1: CITYCOM SERVICES

1. Internet Broadband Service

2. Voice Direct Exchange Line

3. Voice PRI

4. Internet Lease Line

5. MPLS/VPN

6. DLC / Point to Point Connectivity

7. National Long Distance

8. International Long Distance”

7.2 The relevant clauses of the MSA dated 25.05.2012 executed

between the respondent and MCPL read as under:-

“1.1 DEFINITIONS

O.M.P. (COMM) 395/2023 Page 9 of 22

"Access Infrastructure" shall Include Area Access

Node, backhaul fiber, network facilities comprising

of fiber ducts, fiber strands, splitters, cabinets,

distribution frames, etc from Area Access Node to

CPE.

4. SCOPE OF SERVICES

4.1 STL shall provide Access Infrastructure to

MCPL, relating to the PAF(s) signed by the Parties,

as a Fiber Open Access Network (FIONTM)

Infrastructure Provider on a nonexclusive basis,

unless agreed otherwise by the Parties as per

Annexure-6. MCPL shall avail the Access

Infrastructure to provide Its Subscribers only basic

telephony, IPTV and broadband services, subject to

the terms and conditions of its license agreement

granted by DoT or as a franchisee of any other

service provider only for Voice Services, with

advance intimation of 30 days to STL regarding

such franchisee arrangement and subject to relevant

statutory approvals available with MCPL and

Service Provider. The details of MCPL Service(s)

are provided in Annexure-1.

4.2 STL shall provide the Services in line with the

Service Assurance specified in Annexure-4.

5. CONNECTIVITY ANO NETWORK SAFTEY

5.1 STL shall install, operate and maintain the

Access Infrastructure and MCPL Equipment at

various Projects and subject to all reasonable support

from MCPL; STL shall be responsible to manage the

Access Infrastructure.

5.2 MCPL shall be responsible for providing MCPL

Backhaul Equipment at Area Access Nodes relating

to the Projects, as stated in the PAF and shall also be

O.M.P. (COMM) 395/2023 Page 10 of 22

responsible to Install, establish, operate, maintain

MCPL Backhaul Equipment and bring Its backhaul

capacity up to the Area Access Node in each Cluster

at its own cost including the necessary facilities or

equipments required to enable the capacity for

providing service to its subscribers, as specified in

this Agreement. MCPL and STL shall connect their

networks at the Area Access Nodes relating to the

Projects, as stated in the PAF.

5.3 MCPL to provide a free of cost 2 Mbps internet

line at each Area Access Node for managing the

OLT. However on a case to case basis lf more than

one IP address is required the same shall be provided

by MCPL.

5.6 STL shall be responsible for maintenance and

safe operation of MCPL Equipments, Access

Infrastructure and associated facilities at its own

expense, and will also be responsible for ensuring

that the use of the equipments and associated

facilities comply with all applicable laws, rules and

regulations and does not endanger the safety or

health of employees, contractors, agents or

customers of MCPL.

9. GENERAL OBLIGATIONS OF MCPL

9.5 The Subscriber shall always be the responsibility

of MCPL and shall have contractual arrangement

with them to provide services stated in Annexure-1.

The Subscriber acquisition process including but not

limited to sales, marketing, billing, collection,

retention and authentication/verification of

Subscribers shall be the sole responsibility of

MCPL. MCPL shall indemnify and hold STL

harmless from any loss, damage, cost or expense

which may arise from any claims made by the

O.M.P. (COMM) 395/2023 Page 11 of 22

Subscriber against STL directly.

9.6 MCPL shall provide new connections or services

to the Subscribers only through Access

Infrastructure and not through any other wireline

means, in case such service is covered under this

Agreement.”

7.3 The arbitrator framed two issues quoted below:

“(i) Whether the (MH) LSA, based on the physical

inspection carried out by it, in the premises of the

Claimant on 26.02.2015 and the follow up material /

information collected by it, was right in arriving at

the conclusion that the Claimant was operating

outside the limit of its IP-I Registration and was

providing end to end bandwidth to its customers.

(ii) Whether based on the inspection report and the

follow up material, the Respondent was right in its

decision and approach to raise the demand in terms

of the Demand Notices dated 24.08.2020 and

28.08.2020 against the Claimant.”

8. Both the issues were decided together and the matter was

considered from four facets by the arbitrator. The undisputed facts

emanating from the record and considered by the arbitrator are that the

respondent had an IP-I RC. Clause 2.0 of the RC bars the respondent

from dealing with active equipments. The clarification of 2009 did not

authorise the respondent to provide end-to-end bandwidth. During the

inspection carried out on 26.02.2015 at Pune, active infrastructure was

found in the premises of the respondent.

9. The controversy has its genesis in the regulatory framework

O.M.P. (COMM) 395/2023 Page 12 of 22

governing (IP-I) and Telecom Service Providers under the Indian

Telegraph Act, 1885 (for short „the Telegraph Act‟). As per Section 4

of the Telegraph Act and clause 2.0 of the RC, telegraph services

including end-to-end bandwidth services can be provided only by

licensed entities. The IP-I registrants are authorised only to establish

and lease passive telecom infrastructure to TSP. Clause 2.0 of the RC

is reproduced as under:

“2.0 In no case the company shall work and operate or

provide telegraph service including end to end

bandwidth as defined in Indian Telegraph Act, 1885

either to any service provider or any other customer.”

10. The arbitrator dealt in detail with the first facet that whether the

active equipment was owned by the respondent? It was considered

that after the inspection pursuant to the queries raised by the

petitioner, respondent denied the ownership of the equipment and

stated that equipment belonged to TSPs. The respondent alongwith

letter dated 20.03.2015 enclosed a list of the equipments and details of

installation by the TSPs. The list provided by the respondent was in

consonance with the schedules appended with the MSAs dated

20.01.2012 and 25.05.2012, executed by SNL with Citycom and

respondent with MCPL respectively.

11. Both the Citycom and MCPL vide response dated 06.05.2015

and 19.05.2015 respectively furnished to the petitioner the details of

the nature of the equipment and the dates of installation. Citycom

O.M.P. (COMM) 395/2023 Page 13 of 22

stated that the equipments were taken on lease and MCPL stated

equipments were taken on lease from the respondent.

12. The arbitrator considered the clauses of MSAs and concluded

that the respondent had expressed the intention and capability to

install, operate and maintain the „access infrastructure‟. The definition

of „access infrastructure‟ and clauses 4, 5.1 and 5.2 of the MSA dated

25.05.2012 were taken into account to hold that the equipment

mentioned therein constituted „passive infrastructure‟ which the

respondent had to install and operate. It was noted that under Clause

5.2 of the MSA dated 25.05.2012 it was the responsibility of MCPL to

install, establish, operate and maintain Backhaul Equipment at the

Area Access Node and MCPL provided bandwidth required for

delivering services to the subscribers. Detailed reasons are recorded

by the arbitrator to hold that the respondent was not the owner of

active equipments and it provided only „access infrastructure‟ i.e.

„passive infrastructure‟.

13. It would be pertinent to mention that it was proved that the lease

agreements for active equipments were executed by Citycom and

MCPL with SNL and the respondent respectively but in

correspondence exchanged between the petitioner, TSPs, respondent

and SNL, the petitioner failed to raise a specific query from the TSPs

regarding the ownership of the equipments.

14. The reliance of counsel for the petitioner on letter dated

O.M.P. (COMM) 395/2023 Page 14 of 22

06.06.2015 to contend that SNL admitted equipment belonged to the

respondent is misplaced. It was written in letter that equipments were

leased to various TSP and there was no admission that equipment

were owned by the respondent. Even if the argument of the petitioner

that the ownership of active equipment in the award is attributed to

SNL at one place and to TSP at another is accepted, it does not

advance the case of the petitioner that the equipment was owned by

the respondent.

15. The second facet considered was that whether the respondent

rendered end-to-end bandwidth. The charging mechanisms under the

MSAs, the annexures attached thereto dealing with consideration and

payment terms were examined in extenso. The interpretation given is

that the monthly recurring charges were not determined on the basis of

the bandwidth capacity opted for by the subscribers. Further that

clause 6.3 of the MSA executed with Citycom was unambiguous that

the respondent was itself dependent upon Citycom for bandwidth

requirements needed for rendering maintenance services. It was taken

note of that the novation agreement dated 02.04.2012 between SNL,

Citycom and the respondent was clarificatory and the term „access

infrastructure‟ was substituted by „passive infrastructure‟.

16. The apparent inconsistency between the inspection report and

the demand raised was factored for by the arbitrator. The conclusion

no.2 of the inspection report recorded that the respondent was

O.M.P. (COMM) 395/2023 Page 15 of 22

providing services using Gigabit Passive Optical Network (GPON)

and was billing two service providers, Bharti Airtel Limited (for short

„Airtel‟) and MCPL as per the bandwidth utilised by the end

customers. Inspite of this conclusion the demand was not raised in

relation to Airtel but for Citycom for which there was no mention in

the inspection report.

17. Clauses 5.3, 5.6, 9.5 and 9.6 of MSA executed with MCPL

delineated the scope of services and that the respondent was

responsible only for leasing, installing, operating and maintaining the

passive equipments like fibre, fibre ducts, fibre stand, etc. whereas the

active infrastructure was provided by the TSP. It was not disputed by

the petitioner that these services could lawfully be provided by the

respondent being an IP-I registrant.

18. Reliance on clause 8 of MSA dated 20.01.2012 by the learned

counsel for the petitioner to contend that the respondent was providing

internet broadband services, is of no avail. The MSA was between

SNL and Citycom and the respondent was not a party to it. Further the

arbitrator after considering clause 1.10 read with Annexure-1 of the

MSA concluded that Citycom was responsible for providing internet

broadband services.

19. The contention of the petitioner that the billing under the MSA

was based on bandwidth utilisation and not on dark fiber

infrastructure, lacks merit. The arbitrator after considering the relevant

O.M.P. (COMM) 395/2023 Page 16 of 22

clauses of the MSAs recorded a factual finding that the MSA dated

20.01.2012 shows that the monthly recurring charges were not based

on the bandwidth capacity opted by the end subscriber. The reasons

recorded for conclusion arrived at suffers from no legal or factual

error and calls for no interference under Section 34 of the Act.

20. The third facet dealt was that whether the respondent and SNL

were separate legal entities. SNL was a subsidiary of the respondent,

the factum of it being a separate legal entity was fortified from the fact

that SNL was granted a separate IP-I RC on 28.03.2014 and a unified

license on 26.03.2018. The petitioner granted separate registrations to

the respondent and SNL yet inspection report stated that the SNL was

placed in forefront by the respondent and actually the management

and operation of the active equipment was being carried out by the

respondent. It was rightly held by the arbitrator that this conclusion

was not supported by evidence and was based on surmises and

conjectures.

21. It is noted in the award that the plea of the respondent and SNL

constitute a single entity was not pleaded in the statement of defence

and was urged only during the course of arguments.

22. Another aspect is that the order of NCLT, Ahmedabad dated

26.07.2017 approved the scheme of arrangement involving transfer

and vesting of the demerged undertakings. SNL the demerged

company was recognised as a wholly owned subsidiary of the

O.M.P. (COMM) 395/2023 Page 17 of 22

respondent and the passive infrastructure business of SNL stood

transferred to the respondent. This order was held to be fatal to the

contention of the petitioner that respondent and SNL constitute a

single entity.

23. Lastly, the validity of the demand notice was examined. The

decisions of the Telecom Disputes Settlement and Appellate Tribunal

(TDSAT) in Oil India Ltd. vs. Union of India 2011 SCC Online

TDSAT 404 and Viom Network Ltd. & Anr. vs. S Tel Private Ltd. &

Ors. 2013 (139) DRJ 641 were relied upon in support of the

proposition that in absence of statutory provision under the Telegraph

Act or any clause in IP-I RC for claiming damages for breach of terms

of registration certificate, the demand cannot be sustained and the

only remedy was under Section 73 of the Contract Act. The decisions

of TDSAT may not be binding on this Court but lends support that the

view taken is plausible. The petitioner in the statement of defence

made no pleading of the actual loss suffered on account of violation of

the IP-I RC by the respondent. The law is well-settled that for

awarding liquidated damages under Section 73 of the Contract Act the

twin conditions are required to be fulfilled. First, breach of the

contractual conditions and second, the actual loss or damage suffered

or the proof that it is not possible to prove the actual damage suffered.

The second pre-requisites for claiming damages under Section 73 of

the Contract Act was missing in this case in absence of the pleadings

and proof of actual loss suffered.

O.M.P. (COMM) 395/2023 Page 18 of 22

24. It would be relevant to mention at this stage that even before

this Court, it is not the case set up by the petitioner that there exists a

statutory provision or clause in the IP-I RC for raising demand for

violation of the terms and conditions of IP-I RC. The demand raised

by a statutory authority requires a statutory backing. The arbitrator

reiterated the fact that the demand made against Citycom was

inconsistent with the inspection report wherein Citycom was not

identified as TSP rather it was Airtel.

25. The contention of learned counsel for the petitioner that the

arbitrator took a contrary stand by considering the respondent and

SNL as separate legal entities and yet benefit was given for the period

the application of SNL for unified license was pending, is ill-founded.

The arbitrator has not held the respondent and SNL to be a same legal

entity. It is held that assuming the stand of the petitioner that

respondent had placed SNL in forefront to carry out the operational

management of active equipment is accepted, the demand cannot be

sustained for the period the application for grant of unified license to

SNL remained pending. In other words, from the date of grant of the

unified license to the SNL the scenario changed and SNL became

authorised to operate and maintain active equipments.

26. The contention of learned counsel for the petitioner in letter

dated 22.08.2020 that there was an undertaking by the respondent to

pay the demanded amount is misconceived. From the perusal of the

O.M.P. (COMM) 395/2023 Page 19 of 22

written communication, it is forthcoming that the right to avail legal

remedies was reserved and the details of computation of the demand

were asked for.

27. The arbitrator rightly held the creation of pan-India demand on

the basis of an inspection conducted at one premises of the respondent

at Pune to be pernicious. Admittedly no inspection was carried out in

any other city, without any basis the inspecting team presumed that

similar activities were being carried out in other cities and a pan-India

demand was raised.

28. The proceedings under Section 34 of the Act are not akin to the

first appeal. There cannot be re-appreciation of evidence; plausible

view calls for no interference; every factual or legal error cannot be a

ground for challenge. The interference is to be made only on the

grounds available in Section 34 of the Act. Reference is made to the

following decisions:

28.1 In Prakash Atlanta (JV) v. National Highways Authority of

India 2026 INSC 76 it was held as under:-

“59. (vi) If an arbitral tribunal‟s view is found to be a

possible and plausible one, it cannot be substituted

merely because an alternate view is possible.

Construction and interpretation of a contract and its terms

is a matter for the arbitral tribunal to determine. Unless

the same is found to be one that no fair-minded or

reasonable person would arrive at, it cannot be interfered

with. If there are two plausible interpretations of the

terms of a contract, then no fault can be found if the

O.M.P. (COMM) 395/2023 Page 20 of 22

arbitrator accepts one such interpretation as against the

other. To be in conflict with the public policy of India,

the award must contravene the fundamental policy of

Indian law, which makes it narrower in its application.”

28.2 In Ramesh Kumar Jain v. Bharat Aluminium Company

Limited (BALCO) 2025 INSC 1457 held as under:-

“28. The bare perusal of section 34 mandates a narrow

lens of supervisory jurisdiction to set aside the arbitral

award strictly on the grounds and parameters enumerated

in sub-section (2) & (3) thereof. The interference is

permitted where the award is found to be in contravention

to public policy of India; is contrary to the fundamental

policy of Indian Law; or offends the most basic notions of

morality or justice. Hence, a plain and purposive reading

of the section 34 makes it abundantly clear that the scope

of interference by a judicial body is extremely narrow. It

is a settled proposition of law as has been constantly

observed by this court and we reiterate, the courts

exercising jurisdiction under section 34 do not sit in

appeal over the arbitral award hence they are not

expected to examine the legality, reasonableness or

correctness of findings on facts or law unless they come

under any of grounds mandated in the said provision. In

ONGC Limited. v. Saw Pipes Limited14, this court held

that an award can be set aside under Section 34 on the

following grounds: “(a) contravention of fundamental

policy of Indian law; or (b) the interest of India; or (c)

justice or morality, or (d) in addition, if it is patently

illegal.”

28.3 In Consolidated Construction Consortium Limited Vs.

Software Technology Parks of India (2025) 7 SCC 757 it was held

O.M.P. (COMM) 395/2023 Page 21 of 22

as under:

“46. Scope of Section 34 of the 1996 Act is now well

crystallized by a plethora of judgments of this Court.

Section 34 is not in the nature of an appellate provision.

It provides for setting aside an arbitral award that too

only on very limited grounds i.e. as those contained in

Sub-sections (2) and (2-A) of Section 34. It is the only

remedy for setting aside an arbitral award. An arbitral

award is not liable to be interfered with only on the

ground that the award is illegal or is erroneous in law

which would require re-appraisal of the evidence

adduced before the arbitral tribunal. If two views are

possible, there is no scope for the court to re-appraise

the evidence and to take the view other than the one

taken by the arbitrator. The view taken by the arbitral

tribunal is ordinarily to be accepted and allowed to

prevail. Thus, the scope of interference in arbitral

matters is only confined to the extent envisaged Under

Section 34 of the Act. The court exercising powers

Under Section 34 has perforce to limit its jurisdiction

within the four corners of Section 34. It cannot travel

beyond Section 34. Thus, proceedings Under Section 34

are summary in nature and not like a full-fledged civil

suit or a civil appeal. The award as such cannot be

touched unless it is contrary to the substantive

provisions of law or Section 34 of the 1996 Act or the

terms of the agreement.”

28.4 In The Supreme Court in Sepco Electric Power Construction

Corporation Vs. GMR Kamalanga Energy Ltd. 2025 INSC 1171

held:

“97……..Therefore, it appears that even if the

arbitrator‟s legal or factual reasoning is faulty, the

courts ought to ideally refrain from interfering with an

O.M.P. (COMM) 395/2023 Page 22 of 22

award until an error of law is evident from the award

itself or in a document that forms an integral

component thereof.”

(emphasis supplied)

29. As discussed above, the arbitrator had examined the dispute

from four distinct angles and taken into consideration the terms of IP-I

RC, MSAs and after detailed discussions recorded reasons for setting

aside the demand notice and letter dated 21.10.2020 of the petitioner.

The view taken by the arbitrator is plausible and suffers from no legal

or factual error, much less perversity and no interference is called for.

30. The petition is accordingly dismissed.

AVNEESH JHINGAN, J

AUGUST 12, 2026

Pa

Reportable:- Yes