On 10.10.2018, in the matter of Radha Chemicals v. Union of India, the Hon’ble Supreme Court in its order (Order 10-Oct-2018) reiterated that the court while deciding a petition under Section 34 of the Arbitration and Conciliation Act, 1996 has no jurisdiction to remand the matter to the Arbitrator for a fresh decision. The Hon’ble Court relied upon the decision of the the Hon’ble Supreme Court in the matter of:
Kinnari Mullick and Another versus Ghanshyam Das Damani ((2018) 11 SCC 328)
In this case the question which arose before the Hon’ble Court was
“Whether Section 34 (4) of the Arbitration and Conciliation Act, 1996 empowers the Court to relegate the parties before the Arbitral Tribunal after having set aside the arbitral award in question and more so suo moto in absence of any application made in that behalf by the parties to the arbitration proceedings?”
The Hon’ble Supreme Court made the following observations:
On a bare reading of this provision, it is amply clear that the Court can defer the hearing of the application filed under Section 34 for setting aside the award on a written request made by a party to the arbitration proceedings to facilitate the Arbitral Tribunal by resuming the arbitral proceedings or to take such other action as in the opinion of Arbitral Tribunal will eliminate the grounds for setting aside the arbitral award. (Para 13)
The quintessence for exercising power under this provision is that the arbitral award has not been set aside. (Para 13)
Further, the challenge to the said award has been set up under Section 34 about the deficiencies in the arbitral award which may be curable by allowing the Arbitral Tribunal to take such measures which can eliminate the grounds for setting aside the arbitral award. No power has been invested by the Parliament in the Court to remand the matter to the Arbitral Tribunal except to adjourn the proceedings for the limited purpose mentioned in sub-section 4 of Section 34. (Para 13)
In any case, the limited discretion available to the Court under Section 34(4) can be exercised only upon a written application made in that behalf by a party to the arbitration proceedings. It is crystal clear that the Court cannot exercise this limited power of deferring the proceedings before it suo moto .(Para 14)
Moreover, before formally setting aside the award, if the party to the arbitration proceedings fails to request the Court to defer the proceedings pending before it, then it is not open to the party to move an application under Section 34(4) of the Act. (Para 14)
For, consequent to disposal of the main proceedings under Section 34 of the Act by the Court, it would become functus officio . In other words, the limited remedy available under Section 34(4) is required to be invoked by the party to the arbitral proceedings before the award is set aside by the Court. (Para 14)
Copy of the Judgement: Judgement 20-04-2017
-Tushar Kaushik