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Recourse Against Arbitral Award
INTRODUCTION
The Parliament passed the Arbitration and Conciliation Act of 1996, which corrected several severe flaws in previous arbitration laws and introduced new, globally agreed-on arbitration principles. The arbitral award was given the same weight as the Court's decision. The arbitral award is enforceable in the same way as a judicial order is. As a result of this move, there has been a decrease in the number of cases filed in some areas of arbitration. Previously, an award may only be carried out in its own right if the court required it to be filed and a decree released by it.
An arbitral award is not subject to review, and it is definitive and binding between the parties. However, on some grounds stated in Section 34 of the Arbitration and Conciliation Act, 1996, an aggrieved party may apply to a law court to have the arbitration award set aside.
SECTION 34 OF THE ARBITRATION AND CONCILIATION ACT
This section specifies the conditions for setting aside an arbitral award issued in India. i.e.
- Incapacity of a party while seeking to enter into an arrangement.
- If an arbitration deal is not binding under the Act.
- The designated Arbitrators and the Arbitral Tribunal were not adequately announced to the parties.
- The nature of the case prohibits arbitration from being used to resolve it.
- The parties' agreement did not publish the arbitral award.
- The arbitral award is in breach of a state's public policy.
Regarding the limited time for bringing an application, Section 34(3) specifies that an aggrieved party must file an appeal to set aside an arbitration decision within three months of receiving it. Section 36 establishes the value of this by stating that the reward becomes enforceable as soon as the restriction date under Section 34 ends. However, under section 33, the court can grant a 30-day delay on the aggrieved party's request if the court is satisfied that there is a reasonable cause based on the facts.
In the case of National Aluminum Co Ltd v. Pre steel Fabrication (P) Ltd, the Supreme Court had a false presumption that it had the authority to set aside an arbitral award made by the Arbitral Tribunal. The Supreme Court found that time spent on a bona fide prosecution of an appeal in the wrong forum was ample ground for the delay to be exempted.
According to the Code of Civil Procedure, an executing court may decree if the appeal court does not grant a stay. Similarly, if an appeal to set aside an arbitral award is filed under section 34 of the Arbitration Act, the executing court has no power or jurisdiction to carry out the award unless and until the claim is rejected or denied under section 34.
A party to the arbitration agreement must apply for the reward to be set aside under section 34. However, since he is an individual arguing under that, a legal representative of some other group may request it. By law, an award that has been set aside is no longer valid. Setting it aside denotes that it has been deemed null. The parties revert to their previous positions in the controversy over their allegations, and the case is once again available for judgment. Following the setting aside of an order, the parties choose to go back to negotiation or have the matter settled by a court of law.
CONSTITUTIONAL VALIDITY
In TPI Ltd. V. Union of India, the appellant argued in a writ petition that there should be an absolute right to set aside an arbitral award on the grounds offered. If there is not, section 34 should be found unconstitutional. The court rejected the writ appeal, arguing that arbitration is an alternative venue for resolving a conflict. It is up to the parties to step in of their own free will for their disputes and whether they mutually adhere to the arbitral tribunal's ruling. There is no statutory requirement for the parties to use the arbitration process.
CONCLUSION
When determining challenges under this provision, courts must bear in mind that the legislature's purpose in eliminating the 1940 Act and replacing it with the 1996 Act was primarily to give arbitration hearings finality, and judicial intervention was meant to be severely limited.
This article is based purely on the author's personal views and opinions in exercising the fundamental right guaranteed under Article 19(1)(a) and other related laws being a force in India for the time being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, the white code VIA Mediation and arbitration center shall not be responsible for any errors caused due to human error or otherwise.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre shall not be responsible for any errors caused due to human error or otherwise.
- Introduction
- Analysis of Section 34
- Conclusion
