Firm Matters

Khaitan & Co successfully represented Styrenix Performance Materials Ltd before the Hon’ble Bombay High Court in Appeal No. 610 of 2011 under Section 37 of the Arbitration and Conciliation Act, 1996, challenging the dismissal of its Section 34 petition against an arbitral award dated 23 February 2011. 

By judgment dated 8 June 2026, the Division Bench allowed the Appeal, set aside the impugned judgment dated 5 August 2011, and restored the Section 34 petition for fresh consideration on merits. 

The dispute centred on the interpretation and applicability of the Force Majeure clauses (Clauses 41, 43 and 44) under the contract, which formed the core issue in the arbitration. We contended that the learned Single Judge failed to consider its submissions on the construction and legal effect of these clauses.

The Division Bench held that while a court exercising jurisdiction under Section 34 cannot re-appreciate evidence or substitute findings of fact, it is nevertheless required to adjudicate substantive legal issues, including questions of contractual interpretation, when specifically raised. The Court recognised that the issue before the Section 34 court was not re-appreciation of evidence, but whether legal rights had accrued to Styrenix upon a proper construction of the Force Majeure provisions.

As a consequence, the Court directed refund of approximately INR 16.6 crores deposited by Appellant and subsequently withdrawn by the Respondent. The Court further directed that in the event of non-compliance, the Prothonotary and Senior Master was to invoke the bank guarantee and refund the amount to the Appellant.

The judgment is significant as it reinforces that while judicial interference with arbitral awards remains limited, courts exercising jurisdiction under Section 34 must render reasoned findings on core legal issues, particularly those involving contractual interpretation. The ruling brings clarity on the minimum standard of reasoning expected of courts exercising supervisory jurisdiction under Section 34 of the Act.