FRONT PAGE

Theme: Alternate Dispute Resolution (to be chosen from the themes specified)

Title of the Paper: ALTERNATE DISPUTE RESOLUTION WRT TO INDIAN

LEGAL SYSTEM. (in caps) 

Author’s Name : Rajat kashyap

Designation: 3rd year BBA LLB Student of Chanakya National Law University

Co-author: Shubhangi Pandey (if applicable)

Designation: 1st year LLB Student of Galgotias University: School of Law

E-mail id: rajatkashyaprock@live.com

Contact No.: 9631265090/8920054881

pg. 1
 Alternative Dispute Resolution

ALTERNATE DISPUTE RESOLUTION WRT TO INDIAN LEGAL SYSTEM.

I. INTRODUCTION

An arbitration award is the award granted by the arbitrator in their decision. This award can be
money one party has to pay to the other party. It can also be a non-financial award, such as
stopping a certain business practice or adding an employment incentive. 1This research project
discusses in detail Section 34 of the Arbitration and Conciliation Act, 1996, and tries to
understand the extent to which courts can interfere with the arbitration process since it is
something that must be discouraged else it would be the end of the independence of the
arbitration. The project also delves into the finality of arbitral awards and in what cases it may be
set aside as in cases of public policy.

Settling a dispute by referring it to a third person was well known in ancient and medieval
India. If any of the parties to the dispute was not satisfied with the decision, he could go on
an appeal to the Court of law and ultimately to the King itself.2 The modern law of arbitration
evolved in the form of Regulations framed by the East India Company whereby the courts
were empowered to refer the suits to arbitration.

The first Indian Arbitration Act of 1899 was based on the English Arbitration Act of 1889.
Then came the Indian Arbitration Act, 1940, and finally the Arbitration and Conciliation Act,
1996 (the "Act") was enacted by Parliament based on the UNCITRAL Model Law on
International Commercial Arbitration, 1985.3

Prior to the enactment of the 1996 Act, Section 30 of the Indian Arbitration Act, 1940,
contained rather broad grounds for setting aside an arbitral award. In contrast, Section 34(2)
of the Act sought to restrict the grounds for challenging an award. Setting aside procedures
1
Legal Match, What is Arbitration Award?,http://www.legalmatch.com/law-library/article/what-is-an-arbitration-
award.html accessed on 19th February , 2018, at 4:45 p.m. IST.
2
P.C. Rao & W. Sheffield, Alternative Dispute Resolution (Delhi: Universal Law Publishing Co. Pvt. Ltd., 1997)
at 33.
3
K.D. Kerameus, "Waiver of Setting Aside Procedures in International Arbitration" 41(1) The American
Journal of Comparative Law (1993), http://links.jstor.org/sici

Page 2
 Alternative Dispute Resolution

are provided so as to act as a check on the powers of the arbitrators, to prevent them from
going beyond their scope of authority. However, there is another school of thought which
advocates that provision for setting aside of an arbitral award should never be envisaged. The
parties should stick to their award and any mistake, however inflated it may be and an award
however unreasonable it may be, should be treated the same as a final judgment.

Court cannot reassess the evidence even if arbitrator committed error. 4 The Court has no
jurisdiction to substitute its own valuation of conclusion on law/fact. 5 It cannot sit in appeal
over the conclusions of arbitrator and reexamine or reappraise evidence which had been already
considered by the arbitrator.6 To investigate misconduct, Court may see simply the record
before the arbitrator but not examine it.7

It is further stated by proponents of this school that Arbitrators are judges of fact as well as law
and has jurisdiction and authority to decide wrong as well as right, and thus, if they reach a
decision fairly after hearing both sides, their award cannot be attacked.8 However erroneous his
decision may be, it cannot be interfered with by any Court.9

But as according to the Section 34 of the Arbitration and conciliation act one has recourse to
arbitral award. Throughout this research, it is argued that even though recourse to arbitration was
made to keep the dispute resolution system simple and less technical, arbitration was never
meant to be unresponsive to the cannons of justice and fair play. Therefore, if the arbitrator
does not follow the principles of natural justice, the aggrieved party must be provided with
recourse, for justice should not only be done swiftly, but it must appear to have been done.
The argument on finality of a final decree does not hold water. There are provisions in the
Civil Procedure Code for review and revision. Similarly, the notion that by providing for
setting aside procedures arbitration is subjugated by the adjudication is erroneous.
4
Eastern and North East Frontier Railway Cooperative Bank Ltd. v. B. Guha & Co. AIR 1986 Cal 146, Uttar Pradesh
State Electricity Board v. Searsole Chemicals (1995) 2 Arb LR 320, National Electric Supply and Trading
Corporation Pvt. Ltd. v. Punjab State AIR 1963 Punj 56
5
Francis Klein Pvt. Ltd v. Union of India 1995 2 Arb LR 298
6
State of Orissa v. R.N. Mishra AIR 1984 Ori 42, Swaran Singh v. University of Delhi AIR 1994 Del 290, Samyukt
Namrata v. Delhi Development Authority 1986 2 Arb LR 48, Sarabjit Singh v. State of Punjab AIR 1985 P&H 179,
New Snow View Transport Pvt. Ltd AIR 1994 NOC 311 (H.P.), R.S. Builders v. Delhi Development Authority
AIR 1995 Del 10, Shivlal Prasad v. Union of India AIR 1975 MP 40
7
Jagdish Chander v. Hind Vegetable Oils Corporation AIR 1990 Del 204, Eastern and North East Frontier
Railway Cooperative Bank Ltd. v. B. Guha & Co. AIR 1986 Cal 146.
8
Yeshwantrao Ganpatrao v. Dattarayarao Ramachandranrao AIR 1948 Nag 162 (DB).
9
Bharu Kure Jat v. Tara Lal AIR 1962 Punj 173.

Page 3
 Alternative Dispute Resolution

Arbitration and adjudication are nothing but various means of seeking justice. So if one method
fails to provide for justice then the other means should be resorted to. Both should be seen as
complementing each other rather than fighting for supremacy over each other.

II. GROUNDS AND PROCEDURE FOR SETTING ASIDE OF ARBITRAL AWARD

Not everyone takes defeat in their stride. So whenever an arbitral award goes against one of
the parties to the dispute, he seeks ways of setting it aside. An award can be set aside only
on the grounds mentioned in Section 34 of the Act. The purpose of setting aside is to modify
in some way the award in part or wholly.10Section 34 read with section 37 of the Act it is
provided that an arbitral award can be appealed against on limited question of fact and law.
Section 34 lays down the grounds on which an award passed by the arbitral tribunal can be set
aside, and at the same time section 37 enumerates when an award can be appealed against. These
include capacity of a party, invalidity of arbitration agreement, violation of principles of natural
justice and the exceeding of terms of reference by arbitrator, and hence a mechanism has been
provided.11 Here it is a summary kind of procedure which is to be applied by the court to resolve
dispute.
EFFECT IF APPLICATION IS MADE TO SET ASIDE THE AWARD

 Either to set aside the award in part or whole

 Confirm arbitral award in part or whole
 Modify the award
 Remit it back to the arbitral tribunal for reconsideration

No appeal can be made on merits if Arbitration award is set aside. But certain grounds have been
provided under which we can ask court to set aside the award.

Grounds for setting aside the award12

10
A. Redfern & M. Hunter, Law & Practice of International Commercial Arbitration (London: Sweet &
Maxwell, 2004) at 404.
11
Law Teacher, Setting aside an arbitral award, http://www.lawteacher.net/free-law-essays/commercial-
law/setting-aside-an-arbitral-award-commercial-law-essay.php#ftn1#ixzz4725sw4ty, accessed on 10th February ,
2018 at 5:30 p.m. IST.

Page 4
 Alternative Dispute Resolution

The Supreme Court in case of State of U.P. v. Allied Constructions 13 made it clear that an award
cannot be set aside by the court unless it is challenged on one or the other grounds specified in
Sec 34 of the Act. The only other grounds besides those mentioned in Sec 34 are challenge to the
jurisdiction of arbitrator under Sec 16(6) aand arbitrator being interested Sec 13 (5).

An award may be set aside by the court in two ways:

 The party makes an application

 Court finds itself

Sec 34(2) (a) states that if the party making an application proves that-

1) A party was under some incapacity.

It can be assumed that if a party is a minor or unsound mind or the person is incapable of
protecting his/her interest in that it is termed as incapacity.

2) When the Arbitration agreement is not valid under the law to which the parties
have subjected it or, failing any indication thereon, under the law for the time being
in force.

The validity of the agreement is normally decided by the law to which the parties have subjected
to themselves to be governed, where there is no such specific mention, it is decided according to
the law of the country where the contract or agreement is made. 14 In some cases like when parties
have to question the validity of the arbitration agreement, and the tribunal if accepts the request
than party can go in appeal against that decision under Sec 37, but if they have been given no
remedy under Sec 16(6) and award has been made than that award can be challenged under
Section 34(2)(a)(ii).

Basically there are two aspects of Sec34(2) (a) (ii)

1. Arbitration agreement does not exist

2. Arbitration agreement exists but is not valid.

12
Sec. 34 of the Arbitration and Conciliation Act, 1996(as amended by the Arbitration and Conciliation amendment
Act, 2015).
13
2003 7 SCC 396.
14
Corporation Products Co. India Ltd. v. Ayaz Ghadiya, AIR 1997 Bom 331.

Page 5
 Alternative Dispute Resolution

The ground will lead to invalidation of Arbitral award. Plea of invalidity is different from
nonexistence of the arbitration agreement. In Case of Tarapore and co. v. State of M.P.15in this
case court differentiated between two aspect and court said that the plea of non existence of
Arbitration agreement shall be taken at the first instance in Sec 16 itself and there is the Arbitral
tribunal rejects to take it into account than it can be raised in Sec 34 through Sec16 (6) as non
existence of Arbitration agreement has not been expressly mentioned in any of the clauses of Sec
34. And with regard to the other ground that is ‘invalidity’court said that the invalidity of
Arbitration agreement is a ground under section 34 for setting aside of arbitral award and has
been expressly mentioned u/s 34(2) (a) (ii) and plea of that ground may be raised even for the
first time before the court in a proceeding for setting aside of Arbitral award.16

3) When the party making the application was not given proper notice of the
appointment of an arbitrator or of the arbitral proceedings or was otherwise unable
to present his case.
The award may be set aside where a party is deprived of opportunity to place its case before the
arbitral tribunal for want of notice. The parties should be given sufficient advance notice of any
hearing of the arbitral tribunal for the purpose of placing its defence or for inspection of goods,
documents or other property as mandated under Sec 24(2). Non compliance of these obligation
in reference to a party would render the award liable to be set aside by the court under section 34.
In case of State of Gujarat v. B. B. Chouhan, 17 the award was passed by the Arbitral Tribunal
without considering the question whether proper notice was served on the complaining party.
The award being challenged on this ground was set aside.
4) The Arbitral award deals with a dispute not contemplated by or not falling within
the terms of the submission to arbitration, or it contains decisions on matters
beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated
from those not so admitted, only that part of arbitral award which contains
decisions on matters not submitted to arbitration may be set aside; or

15
1994 SCC (3) 521.
16
Law relating to Arbitration and Conciliation in India, By Dr. N.V. Paranjape, published by Central Law Agency,
6th Edition 2016.
17
AIR 2003 (NOC) 211 (Guj).

Page 6
 Alternative Dispute Resolution

The arbitral award may also be challenged on the ground that it contains decision on
matter beyond the scope of submission of arbitration, states three things:
i. it was not contemplated by reference- suppose reference was regarding particular
aspect of particular issue and arbitral award was made on the issue which was not
referred.
ii. not falling within terms of reference
iii. decisions on matter beyond the reference
and hence if not done according to the provisions it is a ground.
5) The composition of the arbitral tribunal or the arbitral procedure was not in
accordance with the agreement of the parties, unless such agreement was in conflict
with a provision of this Part from which the parties cannot derogate, or, failing such
agreement, was not in accordance with this Part; or

Section 34(2) (b) states that

An arbitral award may be set aside by the court if the court finds that—

(i) The subject-matter of the dispute is not capable of settlement by arbitration under the
law for the time being in force.

The act of 1996 does not permit the arbitrator to arbitrate on the matter or dispute which are non
arbitrable under the act. Therefore it is a condition present for the exercise of power of an
arbitrator that the dispute should be of an arbitrable nature. 18 The dispute of the following nature
have been held to be non arbitrable and therefore, the arbitrator has no power to arbitrate over
them19:-

 Proceeding in insolvency
 Matters of public right
 Probate proceedings and genuineness of a will
 Winding up proceedings of a company under the companies act.
 Disputes involving private right of the parties.
 Proceedings relating to the appointment of guardian.

18
Union of India v. Popular Builders, 2000 8 SCC 1.
19
Supra 16.

Page 7
 Alternative Dispute Resolution

(ii) The arbitral award is in conflict with the public policy of India.

Amendment of 2015 in Arbitration and Conciliation act 1996, has added two explanations in
relation to public policy in the above clause, and also it has inserted Sec 2A which is one more
ground for setting aside of the award and which reads as follows:

Section 34(2A)An arbitral award arising out of arbitrations other than international
commercial arbitrations, may also be set aside by the court, if court finds that the award is
vitiated by patent illegality appearing on the face of the award:

Provided that an award shall not be set aside merely on the ground of an erroneous
application of the law or by reappreciation of evidence.

PROCEDURE
(a)An appeal to set aside an award has to be strictly made by the aggrieved party within 3
months from the date the award was received by it. A request can also be made under section 33,
provided that the court is satisfied that there was a sufficient cause for the delay, thereby
allowing the appeal to set aside an award to be made within 30 days after the 3 month period. 20
Hence the award should be challenged timely as per the provision of section 34(3) of the Act.
An application for setting aside may not be made after three months have elapsed from the date
on which the party making that application had received the arbitral award or, if a request had
been made under section 33, from the date on which that request had been disposed of by the
arbitraltribunal: 

Provided that if the court is satisfied that the applicant was prevented by sufficient cause from
making the application within the said period of three months it may entertain the application
within a further period of thirty days, but not thereafter.

If party proposed to challenge the award, acted upon the award then later on they can’t challenge.
Burden of proof that award is invalid, is on the person making the challenge.

(b)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

20
Section 34(3) of the Arbitration and Conciliation act, 1996.

Page 8
 Alternative Dispute Resolution

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.21

(c)An application under this section shall be filed by party only after issuing prior notice to the
other party and such application shall be accompanied by an affidavit by the endorsing
compliance with the said requirement.22

(d)An application under this section shall be disposed of expeditiously, and in any event within a
period of one year from the date on which the notice referred to in sub section (5) of the act is
served upon the party.

III. JUDICIAL RESPONSE IN RELATION TO TERM PUBLIC POLICY

One of the right available to the party in an arbitration award that if the arbitral award is in
conflict with the public policy of India it can be set aside. As per the explanation 1of Sec 34 (2)
(b)(ii) which has been inserted by replacing earlier explanation through 2015 amendment act,
and which clearly defines the term “public policy” it reads as follows:

Explanation 123- For the avoidance of any doubt, it is clarified that an award is in conflict with
the public policy of India, only if-

(i) The making of the award was induced or affected by fraud or corruption or was in violation of
Section 75 or Section 81; or

(ii) It is in contravention with the fundamental policy of Indian law; or

(iii) It is in conflict with the most basic notions of morality or justice.

Before this amendment the term "public policy" was not defined in the Act. A simple attempt
to describe it was contained in the Legal glossary of the Ministry of Law, Justice and
Company Affairs, Government of India, namely that public policy is "a set of principles in
accordance with which communities need to be regulated to achieve the good of the entire
21
Section 34(4) of the Arbitration and Conciliation act, 1996.
22
Section 34(5) of the Arbitration and Conciliation act, 1996, as inserted by 2015 Amendment.
23
Section 34(2)(b)(ii) explanation 1, of Arbitration and Conciliation act, 1996 as amended by act of 2015.

Page 9
 Alternative Dispute Resolution

community or public".24 Clearly, the term public policy is very open ended, depending on
some socio-cultural notions prevailing in the society and impossible to straightjacket25
although now it has been defined in stricter terms.

In England, public policy is interpreted to mean firstly, anything which does not go against
the fundamental conceptions and morality of the English system, secondly which does not
prejudices the interests of the country or its relations with foreign countries and lastly, which is
not against the English conception of human liberty and freedom of action.26

In India we find the term public policy in Section 48 of the Arbitration act, 1996 which states
Conditions for enforcement of foreign award and the term public policy has been used
there too along with Section 34 of the Act.

In one of its earlier decisions in Gherulal Parekh v. Mahadeodas Maiya27, the Apex Court gave a narrow
interpretation of public policy. It held that within public policy of India, lay certain determinate
specified heads and that it would not be prudent to begin search for new heads. However, in Central
Inland Water Transport Corp. Ltd. v. Brojo Nath Ganguly 28, the Supreme Court promoted a
wider stance by interpreting the term public policy on the pillars of public conscience, public
good and public interest.

The relevant case laws were Renu sagar Power co. ltd v. General Electric Co. 29 The term public
policy had a very narrow meaning and supreme court faced with the interpretation of expression
public policy u/s 7(1)(b)(ii) of foreign awards (recognition and enforcement act), 1981 and after
this act was repealed Sec 48 of 1996 deals with this ground. In this case Supreme court gave
three principles:

a. Fundamental policy of Indian law.

24
P. Anklesaria, "Scope of the expression public policy in domestic and foreign awards" 9 AIR (2005) at 310.
25
O.P. Malhotra, The Law and Practice of Arbitration and Conciliation (New Delhi: Lexis Nexis Butterworths, 2002) at
786.
26
A. Redfern & M. Hunter, Law & Practice of International Commercial Arbitration (London: Sweet & Maxwell,
2004) at 787.
27
AIR 1959 SC 781.
28
AIR 1986 SC 1571
29
(1994) Supp. 1 SCC 644.

Page 10
 Alternative Dispute Resolution

b. interests of India.

c. Justice or morality.

And no distinction has been made in Section 34 and Section 48, but after the supplementary
report it has been clear that Sec 48 of the act is not par with Sec 34 and Section 34 is wider and
sec 48 has limited ground.

In the case of ONGC Ltd. v. Saw pipes Ltd.30 it was observed that the term “public policy” does
not admit a precise definition. For the purpose of Section 34 the phrase has to be given a wider
connotation and the award could be set aside if it is:

 Contrary to fundamental policy of the Indian law

 Interest of India
 Justice or morality
 Patently Illegal
 It is so unfair and unreasonable that it shocks the conscience of the court
In the instant case related to delay in supply of casting pipes which resulted in delay in
deployment of rigs thereby adversely affecting production of gas. The respondent’s plea was that
the delay was due to shortage of casting pipes which was supported by witness. The Arbitral
Tribunal held that ONGC was not entitled to retain the compensation. ONGC filed a petition
under Section 30 (2) for setting aside the award as the contract clearly provided for pre-estimated
the damages in case of breach which fact the Arbitral Tribunal had not taken notice of. Further
while extending the time for delivery of goods, respondent was informed that he would be
required to pay stipulated damages. On these facts, the supreme court held that the award was
liable to be set aside as it was “unjust, unreasonable, unsustainable, and patently illegal as
well as against the expressed terms of the contract.”
And after this case apart from existing three grounds patent illegality was also added as a
ground. And also it was held that the illegality must go to the roots of the matter if the illegality
is of trivial nature it cannot be held that the award is against the public policy. Also in this regard
a clause has been added to Sec 34 that is Sec. 34 (2A) which states that award would be patently

30
AIR 2003 SC 2629.

Page 11
 Alternative Dispute Resolution

illegal it would be set aside if it appears on the face but the award shall not be set aside merely
on the ground of an erroneous application of law or re-appreciation of evidence.
And for the International Commercial Arbitration in India same narrower view of the
Renu sagar case has been followed but for other cases view of the Ongc v. saw pipes has
been adopted and patent illegality test has been retained. (as a diff between Sec 34 and Sec
48).
And after the 246thLaw report, on that basis an amendment took place in Section 34 of the act
and there the earlier explanation was removed and this new explanation was added 31 which stated
in clear terms the public policy:

(i) The making of the award was induced or affected by fraud or corruption or was in violation of
Section 75 or Section 81

Section 75 talks of confidentiality that if award was against the rules of confidentiality then it
would be treated as violation of public policy and also Section 81 which states that if any
evidence or any document produced during the proceeding is used as a evidence in any judicial
proceeding than too it would be treated as something against the public policy.

(ii) It is in contravention with the fundamental policy of Indian law; or

(iii) It is in conflict with the most basic notions of morality or justice.

LIMITED ROLE OF THE COURT

The catena of cases on the role of court in setting aside the award on an application from a party
suggest that the court does not have power to re-appreciate the evidence in order to examine the
correctness of the conclusions of the arbitral award. It may however examine the clauses of the
agreement to determine the validity of the award.32

31
Law Commission of India, Supplementary to the report of 246 th Law Commission Report, on amendments to
Arbitration and Conciliation act.
32
Union of India v. Jamshedpur Engg., (1994) Supp. 1 SCC 510.

Page 12
 Alternative Dispute Resolution

The Supreme Court in many cases has reiterated that the courts have limited jurisdiction when
they are called upon to decide the objections raised by a party against arbitrator’s award. The
courts have no jurisdiction to sit in appeal and examine the correctness of the award on merits.33

After the Report of Law Commission of India, (246 th report) a case was decided by three judge
bench of the Supreme Court of Western Geco International Ltd.34 which interpreted the term
“public policy” in wider terms by including the ‘Wednesbury principle’ of reasonableness within
the phrase “fundamental policy of Indian Law”, which is a part of public policy and court was
required to find out in the award given by the tribunal that whether there was reasonableness or
not or whether rules of natural justice were followed or not, and by this court got the larger role
to play in the application of this principle and also by this court got the opportunity to interfere
into the merits of the case and thus to stop this intervention Supplementary report was given and
after that amendment took place by the 2015 amendment act which led to the addition of the
Explanation 2 to Sec 34 (2)(b)(ii) which states that:
“For the avoidance of doubt, the test as to whether there is a contravention with the
fundamental policy of Indian Law shall not entail a review on the merits of the dispute.”

And hence it could be stated that now court’s role has been limited as the application of
Wednesbury principle would have led into some deleterious effect being (a) further erosion of
faith in arbitration proceeding among individual (b) reduction in popularity of India as a place
for International and Domestic Commercial Arbitration (c) concern of speed and efficacy of the
dispute resolution and potential for judicial interference (d) an incidental increase in judicial
backlog and hence such amendment was necessary.

IV. CONSTITUTIONAL VALIDITY OF SECTION 34

In TPI Ltd Vs Union of India, in a writ petition, it was contended by the petitioner that a right
to challenge an arbitral award on merits should be present, and in the absence of the same,
section 34 would be unconstitutional. The court dismissed the write petition and stated that the
33
McDermott International Inc. v. Burn Standard Co. Ltd., 2006 (2) Arb LR 498 (SC).
34
2014 (9) SCC 263.

Page 13
 Alternative Dispute Resolution

matter in question was not related to judicial review of a tribunal decision created under any
statute or any administrative action. The arbitration is an alternate forum for redressal of
disputes, and is selected by the parties of their own free will and they agree to the arbitrator's
decision by means of a mutual agreement or contract, which gives a go by to the normal judicial
forum otherwise available to the parties. There is no compulsion or imposition by any statute
compelling the parties to resort to arbitration if a dispute arises.

When the parties have chosen the forum of arbitration and the arbitrator of their choice, it is not
necessary to make a provision for appeal against the award rendered by the arbitrator. The
legislature has the power to specify the grounds on which an award can be challenged and it
would be permissible for the party to challenge the award only on those grounds. If it were
permissible for the court to re-examine the correctness of the award, the entire proceedings
would amount to a futile exercise.

V. CONSEQUENCES OF AWARD BEING SET ASIDE

The effect of an award being set aside is that it no longer remains enforceable by law and the
parties are relegated to their former position as to their rights in the subject matter of the
dispute.35 However, where only a part of the award is set aside and that part is severable from
the rest of the award, the valid part would still remain binding and enforceable on the parties in
the same way as that of a decree of a court. The setting aside of an award acts as a bar to
subsequent arbitral proceeding on the same dispute cannot be referred and the principle of res
judicata applies. In other words, the same dispute cannot be referred for arbitration to another
arbitral tribunal or the same tribunal.

Sub Section (4) expressly provides that the court may, where it deems it proper and it is so
requested by a party, adjourn the setting aside of proceeding for aperiod of time determined by it
in order to give the arbitral tribunal an opportunity to resume the already terminated arbitration
proceedings with a view to eliminating the grounds for setting aside the award.36

35
Union of india v. Bhalla Builders, (1994) 1 Arb. LR 252 (J&K).
36
Supra 16.

Page 14
 Alternative Dispute Resolution

Thus it would appear that normally an arbitral tribunal if functus officio a soon as the award is
made and since it ceases to function, it does not have any power or authority to make change in
the substance of the award except under circumstances which have been enumerated in Section
33 of the act. Subsection 4 of section 34 empowers the arbitral tribunal to resume its powers on
the authority of the court’s order. The resumed arbitral tribunal may also bear fresh evidences if
the court’s order remitting the matter to the tribunal so provides.

The Supreme Court has however made clear in case of Narain Das v. Narsingh Das,37that the
court may order the arbitral tribunal to modify or correct an award where it is imperfect in form
but court cannot substitute its own order for the award of the arbitrator.

VI. CONCLUDING REMARKS

The basic objective of the arbitration act is to minimize the intervention of the court and this can
now be ascertained from the object and the reasons mentioned in the act, by the help of the
provisions, it could be clearly seen the intention of the law makers, as the court is already
overburdened with many of the pending cases and hence to secure the very basis of the
Arbitration proceeding and its usage court’s role is to be kept minimal but as there are some
ground which clearly state the need of setting aside of arbitral award and hence there must be an
opportunity given to court in some cases to review the matter of dispute but while again giving
decisions it has to see that it should not go into merits of the case as which is very necessary for
the independence of the Arbitration procedure.

Amendment in 2015 has very well inserted the provisions which would meet up to the
requirements and objectives of the arbitration act, and also to introduce fairness, speed and
economy in the resolution of disputes through arbitration, bring arbitration proceeding in India
in conformity with the International procedures of the Arbitration, and to reduce extensive
judicial intervention.

The role of Courts has been drastically reduced in arbitral proceedings. A party cannot
approach Courts for setting aside an arbitral award except on very limited grounds. The
grounds to set aside an award have been reduced considerably and have been specified
minutely without an omnibus ground as "or is otherwise invalid" as in Section 30 of the
37
(1995) 1 Arb. LR 167 (SC).

Page 15
 Alternative Dispute Resolution

Arbitration Act, 1940.This has been done so as to lessen the burden on Court and this would
lead to settlement of disputes without resorting to cumbersome Court procedures.38

VII. BIBLIOGRAPHY & REFERENCES

 Legal Match, What is Arbitration Award?,http://www.legalmatch.com/law-
library/article/what-is-an-arbitration-award.html accessed on 19th April,
2016, at 4:45 p.m. IST.
 K.D. Kerameus, "Waiver of Setting Aside Procedures in International
Arbitration" 41(1) The American Journal of Comparative Law (1993),
http://links.jstor.org/sici

38
P.C. Markanda, Law Relating to Arbitration and Conciliation, 2nd Edition, 1997, Wadhwa Publishers, Delhi.

Page 16
 Alternative Dispute Resolution

 Law Teacher, Setting aside an arbitral

award, http://www.lawteacher.net/free-law-essays/commercial-law/setting-
aside-an-arbitral-award-commercial-law-essay.php#ftn1#ixzz4725sw4ty,
accessed on 21st april, 2016 at 5:30 p.m. IST.
 Dr. N.V. Paranjape, Law relating to Arbitration and Conciliation in India,
, published by Central Law Agency, 6th Edition 2016

 P. Anklesaria, "Scope of the expression public policy in domestic and

foreign awards" 9 AIR (2005) at 310.
 O.P. Malhotra, The Law and Practice of Arbitration and Conciliation
(New Delhi: Lexis Nexis Butterworths, 2002) at 786.
 P.C. Rao & W. Sheffield, Alternative Dispute Resolution (Delhi:
Universal Law Publishing Co. Pvt. Ltd., 1997) at 33.
 Redfern & M. Hunter, Law & Practice of International Commercial
Arbitration (London: Sweet & Maxwell, 2004) at 787.
 Law Commission of India, Supplementary to the report of 246th Law
Commission Report, on amendments to Arbitration and Conciliation act.
 P.C. Markanda, Law Relating to Arbitration and Conciliation, 2nd
Edition, 1997, Wadhwa Publishers, Delhi.

Page 17