1. Core Legal Answer & Context: The statement, "The parties cannot appeal against an arbitral award as to its merits and the court cannot interfere on its merits," largely reflects the fundamental principle of party autonomy and the limited scope of judicial intervention in arbitration. Arbitration is an alternative dispute resolution mechanism chosen by parties to resolve disputes outside traditional courts. The finality of an arbitral award is crucial to its efficacy. Courts generally do not sit in appeal over the findings of an arbitrator and cannot re-appreciate the evidence or substitute their own view for that of the arbitrator on the merits of the dispute. However, this principle is not absolute. Judicial review, though limited, is permissible on specific grounds, primarily to ensure fairness, adherence to due process, and compliance with public policy, rather than to re-examine the substantive merits of the decision.

The Arbitration and Conciliation (Amendment) Act, 2019, aimed to further streamline the arbitration process, reduce judicial interference, and promote India as a hub for international commercial arbitration. Its highlights include:

• Establishment of the Arbitration Council of India (ACI): To grade arbitral institutions and accredit arbitrators, thereby improving the quality and credibility of arbitration in India.
• Appointment of Arbitrators: The power to appoint arbitrators was shifted from the Supreme Court and High Courts to arbitral institutions designated by the ACI. This aims to reduce judicial burden and expedite the appointment process.
• Time Limits for Completion of Arbitration: Section 29A was amended to exclude international commercial arbitrations from the 12-month time limit for completion of proceedings, unless the parties agree otherwise. For domestic arbitrations, the 12-month period (from completion of pleadings) remains, with a provision for extension by consent or court order.
• Confidentiality: A new Section 42A was inserted, mandating confidentiality of arbitral proceedings, except for the award's disclosure where necessary for implementation or enforcement.
• Automatic Stay of Awards: The 2019 Amendment clarified that filing an application for setting aside an arbitral award under Section 34 would not automatically operate as a stay on the execution of the award, unless a specific application for stay is made and granted by the court, subject to conditions (e.g., deposit of the awarded amount).

2. Relevant Statutes and Sections:

• Arbitration and Conciliation Act, 1996:
  • Section 34: Lays down the exhaustive grounds for setting aside an arbitral award, which do not include a review of the merits.
  • Section 36: Deals with the enforcement of arbitral awards.
• Arbitration and Conciliation (Amendment) Act, 2019: Introduced significant changes to the 1996 Act, particularly concerning the ACI, arbitrator appointment, time limits, confidentiality, and automatic stay of awards.

3. Important Landmark Cases:

• Associate Builders v. Delhi Development Authority (2015): The Supreme Court extensively clarified the scope of 'public policy' as a ground for setting aside an award under Section 34, emphasizing that a court cannot re-appreciate evidence or substitute its own view for that of the arbitrator. It reiterated that an award can be set aside only if it is patently illegal, shocks the conscience of the court, or is in contravention of fundamental policy of Indian law.
• Ssangyong Engineering & Construction Co. Ltd. v. NHAI (2019): This case further refined the interpretation of 'patent illegality' and 'public policy' post the 2015 Amendment. The Supreme Court held that a court cannot interfere with an arbitral award merely because it disagrees with the arbitrator's interpretation of facts or law, unless the interpretation is perverse or wholly irrational.

4. Clear Conclusion: The statement accurately reflects the general principle that courts do not interfere with the merits of an arbitral award, upholding the finality and party autonomy inherent in arbitration. Judicial intervention is strictly limited to the grounds enumerated in Section 34 of the 1996 Act. The Arbitration and Conciliation (Amendment) Act, 2019, further strengthened this framework by introducing measures to enhance institutional arbitration, expedite proceedings, and reduce unwarranted judicial delays, thereby reinforcing the pro-arbitration stance of Indian law.