IN THE HIGH COURT OF KARNATAKA
E.S. Indiresh, J.
M/s. Abhiram Infra Projects Private Limited - Appellant
Versus
The Commissioner - Respondent
Writ Petition No. 4845 of 2021 (GM-CPC)
Decided On : 31-03-2022
Arbitration - Correction and interpretation of award - Arbitration and Conciliation Act, 1996, Section 33 - The court set aside the order modifying the award as the respondent did not file an application under Section 33 of the Act within the stipulated time period.
Fact of the Case:
The petitioner entered into an agreement for construction work, and an arbitration award was made in their favor. The judgment debtor filed memos in the execution proceedings, and the trial court modified the award, leading to the petitioner filing this petition.
Finding of the Court:
The court found that the trial court erred in modifying the award without an application filed by the respondent under Section 33 of the Act.
Issues: The main issue was whether the trial court had jurisdiction to modify the award without an application under Section 33 of the Act.
Ratio Decidendi: The court held that after the completion of thirty days from the making of the award, no application shall be entertained under Section 33 of the Act for rectification of typographical mistakes.
Final Decision: The court set aside the order passed in the execution petition, thereby allowing the writ petition.
ORDER
1. This Writ Petition is filed by the Decree holder in Execution No.3835 of 2019 on the file of LXXXV Additional City Civil and Sessions Judge at Bangalore, allowing the memo dated 16th January, 2020 filed by the judgment debtor.
2. Facts in nutshell are that, the petitioner had entered into an agreement No.001/2011-12 dated 03rd August, 2011 for execution of Construction of Community Centres at thirteen locations under Phase-2 and work at the identified slums in Bengaluru City. The total amount for the project was Rs.6,41,58,238/- and the time stipulated to complete the project was twelve months. However, for the reasons best known to the parties, the project was not completed within the stipulated period and as such the respondent herein refuted the claims made by the petitioner on account of the delay in execution of work and in that view of the matter the petitioner invoked arbitration clause in the agreement dated 03rd August, 2011. A Sole Arbitrator was appointed on 23rd October, 2017 for adjudication of dispute between the parties. The Arbitral Tribunal, by award dated 08th April, 2019, ordered that the Decree holder/petitioner is entitled for Rs.63,97,750/- with further simple interest at the rate of Rs.15.80% (SBI PLR + 2%) from 09th April, 2016 till realisation. The counter claim filed by the respondent was rejected by the learned Arbitrator. Thereafter, the petitioner herein has filed Execution Petition No.3835 of 2019 on the file of the trial Court to execute the award made by the learned Arbitrator. In the Execution Proceedings the judgment debtor filed Memos dated 16th January, 2020 and 12th December, 2019; and the memo of calculation filed by the Decree holder on 16th January, 2020. The trial Court heard the learned counsel appearing for the parties and allowed the memo dated 16th January, 2020 filed by the judgment debtor/respondent and as such, modified the award. Feeling aggrieved by the same, the Decree holder/petitioner herein has presented this petition.
3. Sri Samaksh Sood, learned counsel appearing for the petitioner drew the attention of the Court to the award at Annexure-B made by the learned Arbitrator and also Section 33 of the Arbitration and Conciliation Act, 1996 (for short, hereinafter referred to as "Act). He submitted that the Executing Court has no jurisdiction to correct the award made by the learned Arbitrator and therefore, he places reliance on the judgment of the Honble High Court of Delhi in the case of S.P.S. RANA v. MTNL AND OTHERS decided on 14th January, 2010; in the case of DO-IT COMPUTER JV A v. THE MUNICIPAL CORPORATION OF GREATER MUMBAI reported in 2018 SCC OnLine Bom.1192; and in the case of UNION OF INDIA v. POPULAR CONSTRUCTION COMPANY reported in (2001)8 SCC 470. Placing reliance on the above judgments, learned counsel appearing for the petitioner submitted that neither the petitioner nor the respondent have filed an application under Section 33 of the Act and therefore the impugned order passed by the Executing Court modifying the award requires interference in this Writ Petition.
4. Respondents are served remained absent.
5. In the light of the submission made by the learned counsel appearing for the petitioner I have carefully examined the finding recorded by he trial Court in the impugned order dated 18th February, 2021. Section 33 of the Act provides as under:
33. Correction and interpretation of award; additional award.-
(1) Within thirty days from the receipt of the arbitral award, unless another period of time has been agreed upon by the parties-
(a) a party, with notice to the other party, may request the arbitral tribunal to correct any computation errors, any clerical or typographical errors or any other errors of a similar nature occurring in the award;
(b) if so agreed by the parties, a party, with notice to the other party, may request the arbitral tribunal to give an interpretation of a specific point or part of the award.
(2) If the arbitral tribunal considers the
UNION OF INDIA vs. POPULAR CONSTRUCTION COMPANY reported in (2001) 8 SCC 470
The main legal point established is that the court cannot entertain applications for rectification of arbitral awards under Section 33 of the Arbitration and Conciliation Act, 1996, after the complet....
The main legal point established in the judgment is that an application for correction of an award must fall within the parameters of Section 33 (1) of the Arbitration and Conciliation Act, 1996, and....
Execution of an arbitral award requires compliance with the 90-day limitation under Section 34; execution petitions filed before this period are impermissible.
An order under Section 33 of the Arbitration and Conciliation Act, seeking corrections of the arbitral award, cannot be challenged under Section 34 of the Act.
The court held that the failure to adhere to the audi alteram partem principle and rectify errors under Section 33 without the appellant's hearing invalidated the supplementary arbitration award.
Violation of Section 33(1) of the Arbitration and Conciliation Act, 1996 and the principles of natural justice led to the setting aside of the impugned supplementary award.
An application under Section 33 for correction of an arbitral award cannot extend the limitation period for challenging that award under Section 34 if it seeks a substantive review.
The main legal point established in the judgment is that once an arbitral award becomes enforceable after the prescribed time limit, no further application under Section 33 of the Act can be entertai....
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