Not Every Legal Mistake Made by Arbitral Tribunal Is Patent Illegality, Scope Limited To Substantive Laws: Delhi High Court

The Delhi High Court clarified the scope of “patent illegality” in arbitration, stating that it applies only to violations of substantive law, the Arbitration Act, or applicable rules. The court emphasized that not every legal mistake by an arbitral tribunal constitutes patent illegality. The case involved a challenge to an arbitral award on the grounds of patent illegality, where the petitioner argued that the tribunal had made errors in applying the law and appreciating evidence. The court held that patent illegality does not cover errors unrelated to public policy or interest and that the grounds for challenging an award under Section 34 are limited. The decision underscores the limited scope of judicial intervention in arbitral awards, focusing on substantive legal violations and public policy considerations.