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SC: If both Parties give consent, then Courts can refer matter to Arbitrator under Section 34 of Arbitration Act

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ARBITRATION AND CONCILIATION law insider

Shivani Gadhavi

Published On: February 15, 2022 at 17:53 IST

The Supreme Court of India on 4th February, 2022 ruled that if both the parties involved in a Case give their consent to remit the matter to the Arbitrator for a fresh reasoned award, then a Court can refer the matter concerned to the Arbitrator under Section 34 of the Arbitration and Conciliation Act.

The Supreme Court Bench of Justices M R Shah and B V Nagarathna was hearing a Petition which was filed to challenge an Order of the Bombay High Court. The Bombay High Court had earlier passed an Order wherein it remanded a Case to an Arbitrator by consent of both the parties.

One of the parties involved in the matter then filed an Application in the Bombay High Court to seek modifications in the original Order. It was contended by the Applicant that the matter should not be given to the same Sole Arbitrator who had earlier heard the matter. This contention of the Applicant was dismissed by the High Court. Hence, the Applicant filed a Petition in the Supreme Court challenging the original Order of the High Court.

The Applicant had filed the Petition under Section 34 of the Arbitration and Conciliation Act, which states principle of Application for setting aside Arbitral award. The Supreme Court Bench observed that Section 34 of the Arbitration Act cannot be applicable under the circumstances when both the parties involved in the Case have given their consent for Arbitration.

The Division Bench while dismissing the Plea of the Applicant stated that, “In the present Case both the parties agreed to set aside the award and to remit the matter to the learned Sole Arbitrator for fresh reasoned Award. Therefore, once the Order was passed by the learned Single Judge on consent, thereafter it was not open for the Petitioner to contend that the matter may not be and/or ought not to have been remanded to the same Sole Arbitrator.”