Advocate Sushila
SUPREME COURT DECIDES UPON THE ISSUE OF MODIFICATION OF ARBITRAL AWARD BY AN ARBITRAL TRIBUNAL
Advocate Sushila Ram 28 Nov 2021

SUPREME COURT DECIDES UPON THE ISSUE OF MODIFICATION OF ARBITRAL AWARD BY AN ARBITRAL TRIBUNAL

A Two Judge Bench of the Hon’ble #SupremeCourt of India comprising of Justices M.R. Shah and B.V. Nagarathna passed a #Judgment dated 22-11-2021 in the case of Gyan Prakash Arya vs Titan Industries Limited {Civil Appeal No.6876 of 2021} and held that an #Arbitrator cannot modify an Arbitral #Award under the Arbitration and Conciliation Act, 1996 (Act) unless there is any arithmetical and/or clerical #error.


In the present case, the Appellant and the Respondent had entered into an Agreement dated 09-07-2003 (Agreement). Subsequently, a dispute arose between the Parties with respect to recovery of pure gold weighing 3648.80 grams (Gold) which was believed to be in the possession of the Appellant.  The Respondent invoked the Arbitration Clause contained in the Agreement. A retired District Judge was appointed by the High Court of Karnataka at Bengaluru (High Court) as the sole Arbitrator to adjudicate the dispute between the Parties. An Award dated 04-12-2010 was passed by the Ld. Arbitrator, whereby the Appellant was directed to return to the Claimant/Respondent the Gold within three months from the date of the Award along with interest @ 18% per annum, and value of Gold to be calculated at Rs.740 per gram from 24-07-2004 and up to the date of delivery of the quantity of Gold. Further, it was ordered that in the alternative, the Appellant shall pay to the Claimant/Respondent the market value of Gold along with interest @ 18% per annum within the said period of three months, and value of Gold to be calculated at Rs.740 per gram from 24-07-2004 till the date of payment.

Thereafter, an Application under Section 33 of the Act was filed by the Respondent before the Ld. Arbitrator seeking modification of the Award dated 04-12-2010 by correcting the computational / arithmetical / clerical error in respect of deletion of “at Rs. 740 per gram as claimed in the claim statement” at Page 14 of the Award and deletion of “Rs.740.00 per gram” at Page 17 of the Award and substitute the same by “Rs.20,747/- per 10 grams” at Page 17 of the Award.

The Ld. Arbitrator vide Order dated 14-01-2011 allowed the said Application under Section 33 of the Act and corrected the original Award dated 04-12-2010 as under:

a) the respondent is directed to return to the claimant within three months from today 3,648.80 grams of pure gold along with interest @ 18% per annum calculating the value of gold at Rs.740.00 per gram from 24.07.2004 and up to the date of delivery of that quantity of gold.

b) in the alternative, the respondent shall pay to the claimant within the said period of three months the market value of 3,648.80 grams of pure gold at [Rs.20,747.00 per 10 grams … value substituted] along with interest thereon at 18% per annum from 24.07.2004 and up to the date of payment.

c) the respondent is directed to pay to the claimant within three months from today a sum of Rs.50,000.00 (rupees fifty thousand only) as the probable loss suffered by the claimant due to his failure to keep up to the time schedule in fulfilling his responsibility as a job worker. If he fails to pay that amount within three months, it shall carry interest @ 18% per annum from the date of this award and up to the date of payment.

d) claimant is also entitled to cost which shall include the expenses shared by the claimant along with respondent for arranging the venue for arbitration.

e) advocate’s fee Rs.30,000.00”


https://theindianlawyer.in/supreme-court-decides-upon-the-issue-of-modification-of-arbitral-award-by-an-arbitral-tribunal/


#supremecourt #arbitration #award #error

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