[Arbitration Law] Whether Court can modify Award under Section 34: Supreme Court Reserves Judgement

The Supreme Court today reserved judgement on the question of whether a Court can modify an award under Section 34 of the Arbitration and Conciliation Act, 1996.

The matter was heard by the bench of Justice RF Nariman and Justice BR Gavai.

Solicitor General Tushar Mehta assisted by Advocate(s) PV Yogeshwaran, Rajat Nair and Kanu Agrawal appeared for National Highway Authority of India.

The respondents were represented by Senior Advocate R. Balasubramanian.

To support his contention that a court of Tribunal which is a creature of a statute has the power that is granted by statute and not beyond it, SGI relied upon the Apex Court judgement of Bindeshwari Prasad Singh v Kali Singh (1977) 1 SCC 57, Super Cassettes Industries Limited v. Music Broadcast (P) Limited (2012) 5 SCC 488 and Morgan Stanley Mutual Fund v. Kartick Das (1994).

SGI’s next contention was that the scope of enquiry under section 34 of the Arbitration and Conciliation Act, 1996 was extremely limited in nature and consequently inhibited adjudication on the basis of documents.

“Despite the positive finding, u/s 34(2) requiring setting aside of the award, the court cannot conduct an adjudicatory exercise to arrive at a different conclusion due to the very nature of the remedy of Section 34 itself,” SGI also contended.

He further contended that Court under section 34 did not have the power to modify or rewrite the award by placing reliance on Apex Court judgement in Raipur Development Authority v. Chokhamal Contractors (1989) 2 SCC 721, McDermott International Inc v. Burn Standard Company Limited (2006) 11 SCC 181.

On January 18, 2021 bench of Justice Rohinton Fali Nariman, Justice K.M. Joseph and Justice Ajay Rastogi had issued notice on the pleas challenging the Madras High Court order passed by the Madurai bench of Justice T. S. Sivagnanam , Justice R. Tharani on February 13, 2020.

The matter has now been reserved for judgement.

Case Title: The Project Director National Highways No. 45 E And 220 National Highways Authority Of India Versus M. Hakeem & Anr.