Radha Chemicals v Union of India
Under contracts from 1987 to 1991, the appellants and respondents used to supply goods to the Union of India. Following this, in 2004 the Appellant and respondent sent a notice to refer to arbitration when a dispute arose between the parties. The arbitrator held the award in favor of the appellant and respondent for a sum worth Rs 21,60,440/- along with 12% interest.
Whether under Section 34 of the Arbitration and Conciliation Act, 1996 the Court
has jurisdiction to remand the matter to the Arbitrator for a fresh decision?
The rule applicable here is Section 34(4) of Arbitration and Conciliation Act,1996 which states that
“(4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of the arbitral tribunal will eliminate the grounds for setting aside the arbitral award.”
The Single Judge ruled that point of limitation has not been decided by the arbitrator properly and thus decided to remand the matter to the arbitrator so that this issue is decided afresh. He further stated that a new Arbitrator should be appointed in order to decide this afresh as he was not aware of the whereabouts of the original Arbitrator. This order was challenged under Section 34 of the act before the Division Bench at High Court where the decision of Single Judge was affirmed. The High Court remanded the matter to the arbitrator stating that reasons must be given to support his decision and after hearing both the parties it was upheld that a fresh award should be rendered in accordance with the law without being influenced by the previous award which was dismissed by the Single Judge.
The order of the Division bench was appealed before the Supreme Court. The Supreme court held that under Section 34(4) limited discretion is available to the court to remand an award that can be exercised only if the parties issue a written application. The apex court relied on the decision taken in the case of Kinnari Mullick and Another v. Ghanshyam Das Damani where it was held that while deciding a matter under Section 34 of the Arbitration and Conciliation Act, 1996 the Court does not hold jurisdiction to remand the matter. Thus it is clear that the judgment rendered by the Single Judge is contrary to the judgment in Kinnari Mullick and Another v. Ghanshyam Das Damani and thus set aside the decision of both Single Judge and Division Bench.
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.