Category: Finality of Arbitral Awards

ISSUE:

Whether the objections with respect to stamp duty and registration of arbitral award can be raised while filing a Section 34 application for setting aside the award or should it be raised only after a Section 36 application has been filed for enforcement of the arbitral award?

RULE:

The lack of paying the stamp duty and registering the arbitral award does not affect the parties’ right to challenge the arbitral award under Section 34 of the Act, 1996 and will be relevant only when the application to enforce the award under Section 36 of the Act, 1996 is filed.

ISSUE:

Whether an arbitral award devoid of a date on it along with lack of reasons behind a missing signature of one of the arbitrators on the award violation Section 31 of the Arbitration and Conciliation Act, 1996, thus rendering the arbitral award invalid?

RULE:

An arbitral award passed by an arbitral tribunal must mention the reasons behind the award, requires signatures of all arbitrators and reasons behind lack of an arbitrator’s signature under Section 31 of the Arbitration and Conciliation Act, 1996.

An arbitral award can be set aside under Section 34 of the Arbitration and Conciliation Act, 1996, if it goes against the provisions of Part 1, including Section 31.

ISSUE:

What is the standard of review that the judiciary should apply to decide a challenge application to the validity of an arbitral award passed under the Arbitration and Conciliation Act, 1996?

RULE:

An arbitral award cannot be reviewed by the court under Section 34 merely on the ground that the court’s opinion on the law or facts is different. The power under Section 34 is not an appellate award and is restricted to the grounds mentioned in the Act.

An arbitrator is not empowered to presume agreements and must rely on the agreements explicitly agreed on by the parties to the dispute to avoid potential challenges to the award on the ground of misinterpretation of the contractual terms.

ISSUE:

Whether the Deputy General Manager had sufficient jurisdiction to be a part of the arbitration?

Whether an arbitral award, once accepted can be challenged again on the ground of lack of jurisdiction of the arbitrator?

RULE:

A party to arbitration who accepts the award passed by the arbitrator/arbitral tribunal cannot challenge the same on grounds that they had agreed to prior the arbitration proceedings.

Any objections to the award must be filed by the aggrieved party prior to accepting the award in light of the arbitration principles.

ISSUE:

Whether an arbitrator is empowered and has jurisdiction to independently widen the scope of reference of an arbitration dispute under the Arbitration Act, 1940?

RULE:

An arbitration agreement determines the scope and extent of the power and jurisdiction of an arbitrator and independent actions done by the arbitrator without prior consent of the parties is not valid.

The rule of acquiescence does not apply when the parties to the dispute participate in the arbitration proceedings post submitting their objections with respect to the arbitrator breaching the scope of the jurisdiction.

ISSUE:

Whether an arbitral award lacking reasons can be set aside by a court on the ground of it falling under public policy of India and thus a ground under Section 31(3) of the Arbitration and Conciliation Act, 1996?

RULE:

An arbitral award should be backed by reasons as per Section 31(3) of the Arbitration and Conciliation Act, 1996, unless and until the parties to the dispute themselves agree and sign a waiver with respect to the same.

The courts are duty bound to assess if the arbitral tribunal has exercised powers inside the boundaries of the jurisdiction or not.