Section 34 of the Arbitration and Conciliation Act 1996 provides for provisions relating to the setting aside of an arbitral award. It has been held in many cases that this section enables the court to check the procedure and constitutionality of Arbitration.
Section 34 provides the circumstances and instances when the Arbitral Award may be set aside.
GROUNDS FOR SETTING ASIDE AND ARBITRAL AWARD
- The first step in the procedure of getting an arbitral award set aside is to file an application in the court for the same.
- An arbitral award would be set aside only in conditions when the party that makes the application have proof about the incompetency of a party.
- In circumstances when it can be proved that the arbitration agreement was invalid or not in accordance with the law that was in force at that time.
- If at any point in time the party that has made the application had not received proper notice regarding the arbitrator’s appointment or relating to any proceeding during the proceeding.
- When the party was not given a fair chance to present his case
- If it is proved in the court that the arbitral tribunal was not composed according to the Arbitration Agreement.
- In circumstances when the proceedings of arbitration were different and not in a way that was mentioned in the Arbitration Agreement
- In matters relating to patent illegality.
- When the court finds that the matter of dispute was such that cannot be settled by way of Arbitration.
- When the award was against the public policy; it is further made clear that against public policy means when there was an element of fraud or in contradiction to the basic ideas of morality.
There is a time limit for making an application for setting aside the arbitral award. An application challenging the award and demanding that the same shall be set aside may not be made after a period of three months has passed after making such an award. Under some circumstances, the court may allow a time extension of one month.
An application under this section could be filed by a party only when the other party has been sent a notice informing the same.
Effect of 2015 Amendment
The award that relates to international arbitration that is seated in India cannot be challenged on patent illegality.
The courts can use their discretion in ascertaining whether an award is in contradiction with any public policy of India.
The petitions of the challenge have to be concluded within one year.