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Award Passed under Section 34 of the Arbitration and Conciliation Act cannot be altered by any Court: Supreme Court

Team SoOLEGAL 21 Jul 2021 3:24pm

Award Passed under Section 34 of the Arbitration and Conciliation Act cannot be altered by any Court: Supreme Court

The SC has held that an award passed under section 34 of the Arbitration and Conciliation Act, 1996 cannot be modified by the court. In the present case, the SC was considering the appeal by NHAI against the High Court of Madras. The Madras High Court in NHAI case dismissed all the appeals filed under section 37 of the said act, holding that, at least in the case of arbitral awards made under the National Highways Act, 1956, Section 34 of the Arbitration Act must be read in such a way as to allow modification of an arbitral award made under the National Highways Act in order to increase compensation.

The Supreme Court held that the judicial trend appears to favor an interpretation that would read into Section 34, giving power to modify, revise or vary the award,“would be to ignore the previous law contained in the 1940 Act, as well as the fact that the 1996 Act was enacted based on the UNCITRAL Model Law on International Commercial Arbitration, 1985.”

The court further pointed out that under Sections 15 and 16 of the Arbitration Act, 1940, the court has the authority to amend or rectify an award in the conditions set forth in Section 15, as well as the authority to remit the award under Section 16.Section 34 proceeding, on the other hand, does not include any challenge to the award's merits, according to the bench. The bench made the following observation after referring to different judgements. The Supreme Court has ruled that Section 34 of the Arbitration Act of 1996 expressly states that no power to modify an award exists.

The Bench also stated that the Parliament clearly intended that no power of modification of an award exists in Section 34 of the Arbitration Act, 1996, The court observed that, “There is no power to modify an award in Section 34. When interpreting a statute, a judge must put himself in Parliament's position and ask if the result is what Parliament intended. Section 34 of the Arbitration Act of 1996 expressly states that no power of amendment of an award exists. It is solely up to Parliament to alter the aforementioned clause in light of the courts' experience with the Arbitration Act, 1996, and put it in line with other international legislation.”



Tagged: Arbitration and Conciliation Act   Supreme Court   Madras High Court   NHAI case   Arbitration Act   National Highways Act   Section 34   UNCITRAL Model Law   International Commercial Arbitration   international legislation  
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