Section 34 arbitration and conciliation act 1996 pdf

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section 34 arbitration and conciliation act 1996 pdf

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The most recent debate that reverberated in the halls of the Apex Court was on the issue whether Section 34 5 of the Arbitration and Conciliation Act, , inserted by Amending Act 3 of w. Before divulging the ratio straightaway, it is rather crucial to understand the scheme of the act along-with the intention of the legislature and the purport of the language, in order to perceive how the court reached its decision. The Arbitration and Conciliation Act, consolidates and amends the law relating to arbitration, and, as such, is a complete code.

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Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy. An Arbitral Award passed under Section 31 of the Arbitration and Conciliation Act, referred to as the ' Act' is essentially a statement of 'determination of issues' by an arbitral tribunal and as a matter of deliberate legal construct no provision for appeal against the award is present in the Act is based on the UNCITRAL Model law.

However, Section 34 of the Act allows an aggrieved party to pray for setting aside the arbitral award. The powers of the supervising court to set aside an Arbitral Award have been crystallized in the limited grounds provided under Section 34 of the Act and also by judicial pronouncements in this regard. Nevertheless, the supervising courts do not have the power to alter or modify or remand back the award for reconsideration to the arbitral tribunal.

As per the settled position of law the duty of the court is limited to set aside the award if it does not withstand the legal scrutiny mandated under Section 34 of the Act. However, in certain cases the courts have altered or modified the Arbitral award before upholding or remanding it to the Arbitral Tribunal. For the purpose of this article, in order to delve further into the less oft used provision, we focus on the subject matter of Section 34 4 of the Act which empowers the Court, where appropriate and so requested by a party, to adjourn the proceedings under Section 34 1 of the Act for setting aside the Arbitral Award, for a period of time determined by it.

The purpose of this provision is to give the arbitral tribunal an opportunity to take steps that in its opinion will eliminate the grounds available for setting aside an award.

Section 34 4 - " 4 On receipt of an application under sub-section 1 , the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.

Section 34 4 of the Act, therefore, empowers the court to merely adjourn the proceedings challenging the arbitral award. In a given scenario, in order to eliminate the defects in the arbitral award, an appropriate court can either set aside the award under section 34 1 or adjourn the proceedings under section 34 4. The conditions pre-requisite for the court to adjourn the proceedings under section 34 4 are — i an application under section 34 1 of the Act to set aside the award; ii subsequent determination by the court that the same is appropriate; and iii request by a party in this regard.

The court cannot exercise its powers suo moto under this Provision. In the case of MMTC v. Vicnivass Agency 1 the Madras High Court adjudicated upon the scope of section 34 4 of the Act and observed its departure from the provision of remand provided under section 16 of the Arbitration Act.

The Court gave a wider interpretation to section 34 4 of the Act even though the said Section does not provide substantive grounds for remand in contrast to section 16 of the Act, which provided three grounds for remittal, namely, i where the award has left undetermined any of the matters referred to arbitration or where it determines any matter not referred to arbitration and such matter cannot be separated without affecting the determination of the matters referred to; or ii where the award is so indefinite as to be incapable of execution; or iii where an objection to the legality of the award is apparent on the face of it.

While section 16 of the Act empowered courts to remit the award back to the tribunal for reconsideration in order to remove the defects, section 34 4 of the Act does not expressly grant such power of remission to the courts to which such application for setting aside the award is made.

The MMTC ruling supra also provided that the power under section 34 4 of the Act is inextricably intertwined with the grounds for setting aside the award under section 34 2 , since the very object of section 34 4 of the Act is to eliminate the grounds for setting aside the award.

Since the amended Act seeks to limit the role of judiciary in arbitral proceedings, the Madras High Court aptly highlighted in the MMTC ruling that , "the scope of the enquiry under section 34 4 of the Act is left to the discretion of the arbitral tribunal and is not to be dictated by the court which considers the application under section 34 1 ".

Ghanshyam Das Damani 2 wherein the Ld. Single Judge of the Hon'ble High Court had set aside the arbitral award due to lack of reason, which was also upheld by the Ld.

Division Bench in appeal. However, the Division Bench suo moto decided to relegate the parties back to the arbitral tribunal with a direction to the arbitral tribunal to assign reasons in support of its award. Therefore, the substantial question of law before the Hon'ble Supreme Court was whether a court, under Section 34 4 of the Act, is empowered to remand the parties back before the arbitral tribunal with a direction to assign reasons in support of the arbitral award, especially when the arbitral award has been set aside by the Single Judge, and the Division Bench has concurred with that finding.

The quintessence for exercising power under this provision is that the arbitral award has not been set aside. Further, the challenge to the said award has been set up under Section 34 about the deficiencies in the arbitral award which may be curable by allowing the Arbitral Tribunal to take such measures which can eliminate the grounds for setting aside the arbitral award. No power has been vested by the Parliament in the Court to remand the matter to the Arbitral Tribunal except to adjourn the proceedings for the limited purpose mentioned in sub-section 4 of Section Burn Standard Ltd.

The object of Sub-section 4 of Section 34 of the Act is to give an opportunity to the arbitral tribunal to resume the arbitral proceedings or to enable it to take such other action which will eliminate the grounds for setting aside the arbitral award.

It is crystal clear that the Court cannot exercise this limited power of deferring the proceedings before it suo moto. Moreover, before formally setting aside the award, if the party to the arbitration proceedings fails to request the Court to defer the proceedings pending before it, then it is not open to the party to move an application Under Section 34 4 of the Act.

For, consequent to disposal of the main proceedings Under Section 34 of the Act by the Court, it would become functus officio. In other words, the limited remedy available Under Section 34 4 is required to be invoked by the party to the arbitral proceedings before the award is set aside by the Court. Vicnivass Agency 4 , wherein the Madras High Court while dealing with the purport of Section 34 4 of the Act had observed:.

On the other hand, Section 34 4 of the new Act, does not prescribe any condition precedent on the substance of the matter but prescribes three procedural conditions namely that there should be an application Under Section 34 1 of the new Act and that a request should emanate from a party and the Court considers it appropriate to invoke the power Under Section 34 4 of the new Act.

Union of India 5 , wherein the Ld. Single Judge of the Hon'ble High Court while disposing the application under Section 34 of the Act had held that the point of limitation had not been decided correctly and directed to remand the matter to the sole arbitrator to decide the point of limitation afresh.

The learned Single Judge had also held that a new arbitrator would have to be appointed in order to decide the matter afresh.

The Ld. Division Bench upheld the judgment of the learned Single Judge in appeal. The Order of the Ld. Division Bench was challenged before the Hon'ble Supreme Court, wherein it was observed that:. Ghanshyam Das Damani , 11 SCC held that the court while deciding a Section 34 petition has no jurisdiction to remand the matter to the Arbitrator for a fresh decision.

It is, therefore, clear that the learned Single Judge's judgment is contrary to this judgment as a result of which both the judgments of the Single Judge as well as the Division Bench have to be set aside. Therefore, in view of aforesaid judicial pronouncements the position of law with respect to Section 34 4 of Act can be summarized as follows:. The content of this article is intended to provide a general guide to the subject matter.

Specialist advice should be sought about your specific circumstances. All Rights Reserved. Password Passwords are Case Sensitive. Forgot your password? Free, unlimited access to more than half a million articles one-article limit removed from the diverse perspectives of 5, leading law, accountancy and advisory firms.

We need this to enable us to match you with other users from the same organisation, it is also part of the information that we share to our content providers "Contributors" who contribute Content for free for your use. Learn More Accept. To print this article, all you need is to be registered or login on Mondaq. Section 34 4 of the Act is produced hereunder- Section 34 4 - " 4 On receipt of an application under sub-section 1 , the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.

Simran Brar. Tanya Prasad. Srisatya Mohanty. It also reaffirmed that the legislative intent of the Arbitration Act is party autonomy and minimal judicial interference in the arbitration process. This compilation seeks to identify the significant developments in arbitration law by the courts of India after the advent of the COVID pandemic. Disputes arising out of a contract containing an arbitration clause, unless specified otherwise, are referred to arbitration.

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The Supreme Court concluded that a court can relegate the parties to the arbitral tribunal, only if there is a specific written application from one party to this effect; and relegation has to happen before the arbitral award passed by the same arbitral tribunal is set aside by the court. The Appellants and the Respondent entered into two developmental agreements for construction of a multistoried building. Subsequently, a dispute arose with respect to the distribution of the flats and its conveyancing deeds. On the basis such nomination by the Respondent, the sole arbitrator commenced the arbitral proceedings. The Appellants subsequently preferred an application under Section 16 of the Act and challenged the jurisdiction 2 of the sole arbitrator on 10 May The sole arbitrator rejected the application on 27 August by way of an interim award. The sole arbitrator issued the final award on 18 June in favour of the Respondent.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy. An Arbitral Award passed under Section 31 of the Arbitration and Conciliation Act, referred to as the ' Act' is essentially a statement of 'determination of issues' by an arbitral tribunal and as a matter of deliberate legal construct no provision for appeal against the award is present in the Act is based on the UNCITRAL Model law. However, Section 34 of the Act allows an aggrieved party to pray for setting aside the arbitral award. The powers of the supervising court to set aside an Arbitral Award have been crystallized in the limited grounds provided under Section 34 of the Act and also by judicial pronouncements in this regard. Nevertheless, the supervising courts do not have the power to alter or modify or remand back the award for reconsideration to the arbitral tribunal.


Correction and interpretation of award; additional award. CHAPTER VII. Recourse against arbitral award. Application for setting aside arbitral awards.


Prior Notice Requirement Under Section 34(5) of the Arbitration and Conciliation Act, 1996

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy. An Arbitral Award passed under Section 31 of the Arbitration and Conciliation Act, referred to as the ' Act' is essentially a statement of 'determination of issues' by an arbitral tribunal and as a matter of deliberate legal construct no provision for appeal against the award is present in the Act is based on the UNCITRAL Model law. However, Section 34 of the Act allows an aggrieved party to pray for setting aside the arbitral award. The powers of the supervising court to set aside an Arbitral Award have been crystallized in the limited grounds provided under Section 34 of the Act and also by judicial pronouncements in this regard.

The main objective of the Arbitration Act is to make provision for an arbitral procedure which is fair, efficient and capable of meeting the needs of the specific arbitration and to minimize the supervisory role of the courts in the arbitral process and to permit an arbitral tribunal to use mediation, conciliation or other procedures during the arbitral proceedings in settlement of the disputes. In furtherance of the aforesaid objective, the Arbitration Act underwent two major amendments in the year and , respectively, in order to bring forth pertinent changes in the arbitration landscape of the country with the sole motive of making India an arbitration friendly nation. This compilation seeks to identify the significant developments in arbitration law by the courts of India after the advent of the COVID pandemic i.

The entire Law Fraternity is keen to hear from Lawyers, Solicitors, Judges and Legal professionals from respective Bar associations, state and territory to share ideas, give opinions and light on important matters. Radha Chemicals v. Union of India.

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The goal of the Ordinance is to improve the efficiency and reliability of arbitration as a private dispute-resolution mechanism in India. Among other things, it imposes strict time limits on when arbitrations must be concluded, limits court involvement including with respect to jurisdictional issues , and allows parties to non-Indian seated arbitrations to obtain interim relief from Indian courts. The Ordinance reflects many of the recommendations contained in a report by the Law Commission of India that sought to address perceived inadequacies in the Act. Litigation in the Indian courts suffers from severely backlogged dockets, 2 and it may take up to 15 years to obtain a decision.

Do I believe in arbitration? But not in arbitration between the lion and the lamb, in which in the morning the lamb is found inside the lion. Besides all the advantages and amenities available to refer the disputes to arbitration, it is one of the cornerstone drawbacks of the arbitration process that the award passed by the arbitrator is final and binding between the parties and the parties are not entitled to appeal against the award.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy. An Arbitral Award passed under Section 31 of the Arbitration and Conciliation Act, referred to as the ' Act' is essentially a statement of 'determination of issues' by an arbitral tribunal and as a matter of deliberate legal construct no provision for appeal against the award is present in the Act is based on the UNCITRAL Model law. However, Section 34 of the Act allows an aggrieved party to pray for setting aside the arbitral award. The powers of the supervising court to set aside an Arbitral Award have been crystallized in the limited grounds provided under Section 34 of the Act and also by judicial pronouncements in this regard. Nevertheless, the supervising courts do not have the power to alter or modify or remand back the award for reconsideration to the arbitral tribunal. As per the settled position of law the duty of the court is limited to set aside the award if it does not withstand the legal scrutiny mandated under Section 34 of the Act.

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