Published on: 25 August 2023 at 10:30 IST
Court: Supreme Court
Citation: Larsen Air Conditioning V. Union of India, (2023)
Honourable Supreme Court of India has held that Section 34 of the Arbitration and Conciliation Act, 1996 provides for extremely limited judicial interference only on the grounds of patent illegality with either to set aside an award or remand the matter under the circumstances as mentioned in said Section of the Act.
15. The limited and extremely circumscribed jurisdiction of the court under Section 34 of the Act, permits the court to interfere with an award, sans the grounds of patent illegality, i.e., that “illegality must go to the root of the matter and cannot be of a trivial nature”; and that the tribunal “must decide in accordance with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground”.
The other ground would be denial of natural justice. In appeal, Section 37 of the Act grants narrower scope to the appellate court to review the findings in an award, if it has been upheld, or substantially upheld under Section 34. It is important to notice that the old Act contained a provision14 which enabled the court to modify an award. However, that power has been consciously omitted by Parliament, while enacting the Act of 1996. This means that the Parliamentary intent was to exclude power to modify an award, in any manner, to the court.
Drafted By Abhijit Mishra
