2016 (3) TMI 1462 - HC - Indian Laws

Jurisdiction - power of Court under Section 34 of the Arbitration and Conciliation Act, 1996 to remit the matter to the arbitral tribunal after setting aside an arbitral award - HELD THAT - A plain reading of Section 34 of the Act will show that parliament has not conferred any power of remand to the Court to remit the matter to the arbitral tribunal except to adjourn the proceedings as provided under sub-section (4) of Section 34 of the Act. The object of sub-section(4) of Section 34 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. This provision (sub-section(4)) cannot be invoked, once the arbitral Award is set aside. The Court below has erred in law in setting aside the arbitral award without examining the matter as laid down in Section 34 of the Act - The matter is remitted to the Court of the Principal District Judge, Dharwad, for reconsideration in accordance with law - appeal disposed off.

Summary

Issues:
1. Court's power under Section 34 of the Arbitration and Conciliation Act, 1996 to remit the matter to the arbitral tribunal after setting aside an arbitral award.

Analysis:

The judgment in question revolves around the issue of whether the Court has the authority under Section 34 of the Arbitration and Conciliation Act, 1996 to remit the matter to the arbitral tribunal after setting aside an arbitral award. The appeal was directed against an order setting aside an arbitral award dated 06.01.2014 and remitting the matter to the arbitral tribunal for reconsideration. The appellant argued that the Court erred in law by remitting the matter without examining it as required by Section 34 of the Act. The appellant contended that the Court lacks the power of remand under Section 34, except to adjourn proceedings as per sub-section(4) of the Act. The respondent, on the other hand, maintained that the impugned order did not require interference.

The Court analyzed the relevant provisions of Section 34 of the Act, emphasizing that Parliament did not confer the power of remand to the Court except for adjourning proceedings as per sub-section(4). The purpose of sub-section(4) is to allow the arbitral tribunal to resume proceedings or take action to eliminate grounds for setting aside the award, which cannot be invoked once the award is set aside. Citing the Supreme Court decision in McDermott International Inc. v. Burn Standard Co. Ltd., the Court highlighted the limited supervisory role of the Court in arbitral matters, emphasizing that the Court's intervention is only warranted in specific circumstances like fraud or bias. The Court concluded that the lower Court erred in setting aside the arbitral award without proper examination and in remitting the matter to the arbitral tribunal.

In light of the above analysis, the Court set aside the impugned order and remitted the matter to the trial Court for reconsideration in accordance with the law. The Court directed both parties to cooperate for the expeditious disposal of the suit, emphasizing the importance of adhering to the legal provisions and ensuring a fair and just resolution of the dispute.