Kolkata: The Calcutta High Court has upheld an arbitral award directing the Railways to pay Rs 232.44 crore with interest to a private investor under the Wagon Investment Scheme (WIS), rejecting the Railways’ appeal and ordering the release of the investor’s bank guarantees within three weeks.
A Division Bench of Justice Arijit Banerjee and Justice Om Narayan Rai affirmed an earlier Single Bench order that had refused to interfere with the arbitral tribunal’s findings. The judges observed that the award was based on a proper appreciation of evidence and showed no “patent illegality” or “perversity” that would justify judicial interference. The dispute traces back to a 2008 agreement under the WIS, under which the investor purchased two rakes of wagons for railway operations in exchange for assured rake allotments and freight rebates for ten years. In 2016, the investor terminated the contract, alleging that subsequent Railway circulars had unilaterally altered the terms of the scheme, depriving it of contractual benefits.
The arbitral tribunal, after detailed proceedings, found the Railways in breach of contract and awarded the investor Rs 232.44 crore with 9 per cent annual interest from the date of the award until payment.
It rejected the Railways’ counterclaims, holding that the investor’s right to seek arbitration arose upon termination of the contract — making the claim well within limitation.
Challenging the award, the Railways argued that the tribunal had miscalculated losses, wrongly interpreted the scheme, and ignored the
limitation period. The High Court disagreed, observing that the tribunal’s findings were “plausible” and supported by both oral and documentary evidence. Reiterating the narrow scope of interference under the Arbitration and Conciliation Act, the Bench said courts must not reappraise evidence merely because another view is possible. “When a tribunal’s view is reasonable and based on the record, courts must refrain from substituting their own interpretation,” the judges said.
With the dismissal of the appeal, the Bench directed the Registrar to return the two bank guarantees furnished by the investor within three weeks of communication of the order.