Interference by Courts in Interpretation of Terms of Contract
1 Interpretation of an agreement is within the domain of the Arbitrator; Plausible conclusion by Arbitrator; Courts shall not interfere.
2 An Award which blatantly misapplies the provisions of the Contract Law resulting in a perverse interpretation of the law, is liable to be set aside.
3 Mere non consideration of clause of an Agreement which do not go to the root of the Award, cannot be a ground to set aside an Award.
4 Arbitrator’s deliberate departure from the contract amounts not only to manifest disregard of the authority or misconduct on his part, but it may tantamount to malafide action.
5 The Arbitrator is bound to implement the contractual clauses and cannot invoke notions of equity and fairness, unless the contract permits it.
6 The Arbitrator whilst interpreting the terms of the contract may declare that such terms are null and void.
7 An Arbitrator is permitted to apply Rule Of Contra Proferentem, whilst interpreting the Contract between the parties.
8 An Arbitral Award may be declared as patently illegal if it fail to act according to terms of contract or if it has ignored the specific terms of Contract.
9 In Cases of Specific performance of Contracts, grounds of “Inequitable nature of Contract” is ordinarily not available to challenge the Award.
10 Interpretation of a Contract in a manner, may amounts to Rewriting of a contract, which is not permissible in law; vitiates the Arbitral award.
11 “Trade usages” cannot supplant express understanding between the parties under the contract.
12 The Terms of the Contract have to be given effect to; and no discretion is left with the Contracting parties to deviate from the terms of the Contract.
13 An award may be said to be patently illegal where the Arbitral Tribunal has failed to act in terms of the contract or has ignored the specific terms of a contract.
14 Merely because the Contract provides for forfeiture, substantial sum cannot be forfeited by Arbitrator, unless proof of actual loss is furnished.
15 An Award was set aside on the premise that Arbitrator fail to consider important term of the Contract; and the award was passed without discussing the contentions raised by the claimant.
16 Arbitral Tribunal cannot reject the terms of the Contract saying it flouts common business sense.
17 The Arbitral Tribunal are not permitted to apply Business efficacy test resulting in alteration of express and unambiguous contract between the parties.