J U D G M E N T

A. BRIEF OVERVIEW

1. These two cross petitions under Section 34 of the Arbitration and Conciliation Act, 19961 have come to be preferred seeking the following reliefs: -

―O.M.P. (COMM) 95/2023 ―Set aside the Impugned Award dated 07.08.2022 as corrected vide order dated 15.11.2022 passed by the AT in the arbitration proceedings titled "Trichy Thanjavur Expressway Ltd. Vs. National Highways Authority of India " to the extent of the findings challenged above and the award of Claim No. 1 (b) and (g) and Claim No.8:‖

O.M.P. (COMM) 106/2023 a) Set aside and quash the portion of the Impugned Arbitral Award dated 07.08.2022 to the extent of the rejection of the valid and legal claims of the Petitioner/Claimant (whereby claims worth INR 30,27,33,01,844/- were rejected) and to allow the claims which were wrongfully rejected by the Ld. Arbitral Tribunal, and award the same in favour of the Petitioner/Claimant.

b) Alternatively, nominate and appoint an independent sole arbitrator to adjudicate the rejected part of the claims of the Petitioner/Claimant within a time bound manner.‖

1 the Act

2. As would be evident from the reliefs claimed in the two petitions, the appellants question certain parts of the Arbitral Award dated 07 August 2022. While Trichy seeks quashing of a part of the Arbitral Award dated 07 August 2022 to the extent that it had rejected claims amounting to INR 30,27,33,01,844/-, National Highways Authority of India2 seeks the setting aside of the Arbitral Award to the extent of the findings returned by it in respect of Claim No. 1(b) and (g) as well as on Claim No. 8. Additionally, the petitioner NHAI has moved I.A. 5361/2023 for eliminating grounds for setting aside under Sec 34(4) of the Act. When the two appeals were initially called before the Court on 21 March 2023, the question which was raised and stood duly noticed was with respect to whether parts of an award could be severed and whether it could be partially set aside. The attendant question which arose and was so noticed was whether the grant of such a relief would be contrary to the decision of the Supreme Court in NHAI vs. M. Hakeem& Anr.3 and which had essentially held that the power to set aside as conferred by Section 34 cannot be read so as to include the power to vary or modify the award as rendered by the Arbitral Tribunal4.

3. Taking note of the importance of the questions which arose and the fact that any decision rendered on the same would impact

2 NHAI

3 (2021) 9 SCC 1

4 AT

numerous matters pending or yet to be instituted, the Court had published a notice calling upon learned counsels to address submissions.

4. Pursuant to the aforesaid liberty granted, learned counsels and members of the Bar were invited to address submissions on the questions formulated. The Court, at the very outset seeks to duly acknowledge the invaluable assistance that was rendered by the hon‘ble members of the Bar of this High Court. Learned counsels who answered the call of the Court have placed on the record copious material in the shape of erudite written submissions, judgments rendered by courts in India as well as in various foreign jurisdictions, authoritative treatises and background material relating to the formulation of the Model Law, all of which has been of tremendous assistance in enabling it to obtain a comprehensive perspective both from a national and international viewpoint. For this the Court expresses its immense gratitude.

5. The issue arises in the context of Section 34 of the Act which comprises the power of the Court to set aside an Arbitral Award. The issue of severability stood raised principally on account of the Proviso appended to Section 34(2)(a)(iv), which prescribes that if decisions on matters submitted to arbitration can be separated from those which were not, the unsustainable part of the Arbitral Award and which contains decisions on matters not submitted to arbitration may alone be set aside. The question which arose was whether the conce