Reconstructed Record Gaps No Ground To Set Aside Award: Tripura High Court

The Tripura High Court on 1 April, held that a Court hearing a challenge to an arbitral award cannot rely on gaps in a reconstructed record to question the Arbitrator's findings or the existence of material that was before the Arbitrator at the time of adjudication.

A Bench comprising Chief Justice M.S. Ramachandra Rao and Justice Bishawajit Palit set aside the Commercial Court's order, and upheld the arbitral award. They held:

“...merely because they were not found in the reconstructed record, the award of the Arbitrator cannot be interfered with by the Commercial Court because such loss of original record cannot be put by the respondents as a point in their favour to doubt the Arbitrator's integrity and question the very existence of such material at all. Such material has to be believed to exist and also to have been considered by the Arbitrator, though it might have got lost subsequently.”

The Public Works Department, Government of Tripura issued a tender on 27 December 2013 for construction of Kailashahar District Jail. Debashish Das emerged as the successful bidder, and the parties executed a works contract in 2014. The contract commenced on 20 June 2014 and was to be completed by 19 June 2016.

Disputes arose, leading to the appointment of an Arbitrator. After proceedings during 2019–2020, the Arbitrator passed an award on 17 June 2020, partly allowing Das's claims. The Government of Tripura challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996 before the Commercial Court, Kailashahar, which dismissed the petition on 16 March 2022.

On appeal, the High Court remitted the matter on 31 January 2024, holding that the Commercial Court had failed to consider several grounds and had passed an unreasoned order. Upon remand, the Commercial Court set aside the entire award by order dated 31 August 2024. Aggrieved, Das filed the present appeal.

The Commercial Court examined the issues framed by the Arbitrator. On the claim relating to unpaid dues for executed work, Das initially claimed Rs. 28,01,334, which he later enhanced to Rs. 39,66,805 based on Annexure R/2, said to contain an admission of liability by the State. It rejected this finding, noting that Annexure R/2 was neither produced before it nor available in the reconstructed record, and held that the Arbitrator's conclusion was beyond the record and contrary to the fundamental policy of Indian law.

The High Court disagreed. It noted that Annexure R/2 was available before the Arbitrator and had been considered while passing the award. The absence of the document in the reconstructed record before the Commercial Court could not justify interference with the award. It observed:

“Merely because the respondents did not submit the said Annexure-R/2 before the Commercial Court or merely because it was not found in the reconstructed record, it is not permissible for the Commercial Court to interfere with the relief granted by the Arbitrator to the appellant.”

The Bench relied on the decision in Ram Khelwan v Dy. Director of Consolidation, which recognises that reconstruction of records falls within the Court's inherent powers but must not result in one party gaining an unfair advantage due to loss of documents.

Applying this principle, the Court held that loss of Annexure R/2—whether in the custody of the Arbitrator or thereafter—could not prejudice Das, as neither party was responsible for its loss. The judges also noted that Das produced a copy of Annexure R/2 before it, and the State did not dispute its contents, supporting the claim of admission of liability.

On the issue of rescission of contract, the Commercial Court had held that the Arbitrator's finding (holding the State responsible for delay) was beyond the record due to absence of supporting documents in the reconstructed record. The High Court rejected this reasoning for the same reasons, reiterating that missing documents in a reconstructed record cannot undermine the Arbitrator's findings.

Finding no perversity in the Arbitrator's conclusions, the Court held the Commercial Court's order to be unsustainable. It set aside the impugned order and upheld the arbitral award.

Accordingly, the High Court allowed the appeal with costs.