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Head Note

The Arbitration and Conciliation Act, 1996  - Section 34 , Constitution of India, 1950  - Article 13 , Indian Contract Act, 1872  - Section 23

Arbitral award - Setting aside of - Validity of contract - Reasons given by the arbitrator contract was void ab initio are not tenable in law - Arbitrator has further held that under Article 13(3) and (a) of the Constitution of India, law includes a notification of the Government and therefore the letter dated 31.08.2023 of the Government of India, Ministry of Defence was law and as the consideration or object of the agreement between the appellant and the respondent No.2 defeated a provision of law, the agreement was void under Section 23 of the Indian Contract Act - The word "law" in the expression "defeat the provisions of any law" in Section 23 of the Indian Contract Act is limited to the expressed terms of an Act of the legislature - Unless the effect of an agreement results in performance of an unlawful act, an agreement which is otherwise legal cannot be held to be void and if the effect of an agreement did not result in performance of an unlawful act, as a matter of public policy, the court should refuse to declare the contract void with a view to save the bargain entered into by the parties and the solemn promises made thereunder - Award set aside and matter remitted for fresh consideration.

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