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IN THE HIGH COURT OF ALLAHABAD
AJAY BHANOT, J.
National Highway Authority of India - Appellant
Versus
Parimal Bajpai and Others - Respondents
Appeal Under Section 37 of Arbitration and Conciliation Act 1996 No. 901 of 2023
Decided On : 17-11-2023
Arbitration - National Highway Authority of India Act, 1988 - Section 3-G - Arbitration and Conciliation Act, 1996 - Section 34
Fact of the Case:
The Arbitral Tribunal neglected to consider objections raised by the appellant and made a final determination solely on the footing of objections tendered by the respondents-claimants. The appellants took out proceedings under Section 34 of the Arbitration and Conciliation Act, 1996 before the learned District Judge.
Finding of the Court:
The court found that the prerequisites for exercising powers under Section 34(4) of the Act were satisfied, and the court below misdirected itself in fact and law by declining to give the arbitral tribunal an opportunity to resume the arbitral proceedings and cure the defects.
Issues: The main issue was the failure of the Arbitral Tribunal to consider objections raised by the appellant and the misdirection of the court below in declining to give the arbitral tribunal an opportunity to cure the defects.
Ratio Decidendi: The court's decision was influenced by the interpretation of Section 34(4) of the Arbitration and Conciliation Act, 1996, which contemplates a second opportunity for the arbitral tribunal to revive arbitration proceedings to cure the defects in the award.
Final Decision: The impugned order was set aside, and the matter was remitted to the Arbitrator to resume proceedings and determine the objections raised by the appellant on merits.
JUDGMENT :
1. The competent authority under Section 3-G of the National Highway Authority of India Act, 1988 determined the compensation amount liable to be paid to the claimants by award dated 27.08.2020. The Arbitral Tribunal was constituted under Section 3-G(5) of the National Highway Authority of India Act, 1988. The appellant before this Court as well as the respondent-claimant preferred objections against the said award before the Arbitrator. The Arbitral Tribunal while drawing its award neglected to consider the objections raised by the appellant and made the final determination solely on the footing of the objections tendered by the respondents-claimants.
2. Thus, aggrieved, the appellants took out proceedings under Section 34 of the Arbitration and Conciliation Act, 1996(hereinafter referred to as 'the Act') before the learned District Judge which came to be registered as Arbitration Case No. 17 of 2022 (National Highway Authority of India vs. Parimal Bajpai and Others).
3. In the aforesaid proceedings, the case of the appellants before the Court below was that the challenge to the compensation determined by the competent authority was specifically made by the NHAI before the Arbitrator. The Arbitrator failed to make any finding on the objections raised by the appellants/ petitioners and the arbitral award dated 27.08.2020 was passed while the said application remained pending in Case No. C202103000000613.
4. A ground in regard to the aforesaid illegality which vitiates the arbitral award was taken in the proceedings under Section 34 of the Act registered as Arbitration Case No. 17 of 2022 (National Highway Authority of India vs. Parimal Bajpai and Others) before the learned court below. The relevant pleadings are extracted hereunder :
5. The learned court below did not advert to the said grounds and no finding in this regard was made in the impugned order dated 27.08.2020 rendered by the court below while deciding the said Arbitration Case No. 17 of 2022 (National Highway Authority of India vs. Parimal Bajpai and Others). These are the undisputed facts of the case.
6. Shri Aloke Kumar, learned counsel for the appellants submits that the failure of the court below to decide the said categorical objections taken in the proceedings under Section 34 of the Act perpetuates the error of the arbitral tribunal. And as a consequence thereof, an award which is contrary to the fundamental policy of Indian law and also in conflict to the basic notions of morality and justice is sought to be executed against the appellants.
7. Per contra, Shri Shashank Shekhar Mishra, learned counsel assisted by Shri Devesh Kumar Verma, learned counsel on behalf of the respondents contends that the prerequisites for exercise of powers under Section 34 of the Act are not satisfied in as much as no request under Section 34(4) of the Arbitration and Conciliation Act, 1996 was made before the court below to adjourn the proceedings to give the Arbitral Tribunal an opportunity to resume the arbitral proceedings and cure the errors.
8. Heard learned counsels for the parties. At the outset, it would be apposite to reproduce Section 34 of the Act, interpretation of which will govern the fate of the controversy.
(1). Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3).
(2). An arbitral award may be set aside by the Court only if--
(a) the party making the application 1[establishes on the basis of the record of the arbitral tribunal that]--
(i) a party was under some incapacity, or
(ii) the arbitratio
The central legal point established in the judgment is the interpretation and application of Section 34(4) of the Arbitration and Conciliation Act, 1996, which provides for a second opportunity for t....
The concept of any further or other proceeding to resolve the dispute that may be made a subject matter of reference to an arbitral tribunal, is an absolute anathema to the founding principle of arbi....
The Court can partially set aside an arbitral Award and has limited scope of interference under Section 34 of the Arbitration and Conciliation Act, 1996. The Court cannot modify an Award but can set ....
The arbitrator's authority under the National Highways Act is limited to determining compensation, and parties waive their right to object to awards if they do not raise timely challenges.
The court established that an arbitral award can be set aside if it contravenes the principles of natural justice and public policy, particularly when crucial evidence is introduced after the conclus....
Point of Law : Once the time-limit or extended time-limit for challenging the arbitral award expires, the period for enforcing the award under Section 36 of the Arbitration Act commences.
The arbitrator's power to remand the matter, the limitations of setting aside an arbitral award, and the parties' remedies after the setting aside of the award.
The court upheld the discretion under Section 34(4) of the Arbitration and Conciliation Act to remit matters to the Arbitrator for addressing gaps in the award, particularly regarding solatium.
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