The court does not possess the power to modify an arbitral award while hearing a challenge under Section 34 of Arbitration and Conciliation Act, 1996, however, while exercising power under Section 34 can set aside an award partially – Amazing Research Laboratories Ltd. Vs. Krishna Pharma – Delhi High Court
Hon’ble High Court, in this important judgment, held that (i) Notice of Invocation arbitration was sent to respondent through CC, the respondent through the copy of the Notice was made aware of the intention of the petitioner to resolve their dispute through arbitration, the requirement of service of Notice under Section 21 of the A&C Act, 1996 had been duly complied with and the arbitration has been validly invoked in accordance with the provisions of law. (ii) If the award is passed in violation of the provisions of the Transfer of Property Act or in violation of the Indian Contract Act, it necessarily suffers from patent illegality and has to be set aside. (iii) The proviso to section 34(2)(a)(iv) has to be read ejusdem generis to the main section, as in cases falling in that category, there would be an absolute duty on the court to invoke the principle of severability where the matter submitted to arbitration can clearly be separated from the matters not referred to arbitration and decision thereupon by the Arbitral Tribunal. (iv) It thus settled the law and held that the court does not possess the power to modify an arbitral award while hearing a challenge under Section 34 of the Act. (v) The Court, while exercising power under Section 34 of the A&C Act, 1996, can set aside an Award partly, depending upon the facts and circumstances of the case. Following the principle of severability of claims it was held that the Award may be set aside partially. (vi) The aspect of setting aside of partial Award may also be viewed in the context of section 31(6) of the Act, 1996 which permits the passing of an interim award by the Arbitral Tribunal on any matter with respect to which it may make a final award.
