Supreme Court Reinforces “Complete Perversity” Test for Judicial Intervention in Arbitration

The Supreme Court ruled that the High Court can interfere with arbitral proceedings under Articles 226 or 227 of the Constitution only in rare cases of clear perversity.

In this case, the High Court failed to show how the tribunal’s decision was perverse or unfair.

Justice Narasimha emphasized that the arbitral process under Section 18 of the Arbitration and Conciliation Act, 1996, had ensured both parties were given a full chance to present their case.

The Supreme Court restored the tribunal’s original order, reaffirming that unnecessary interference disrupts the arbitration process.