[Arbitration Act] Arbitral Tribunal Cannot Recall Or Modify Its Award Under Section 33: Allahabad High Court
The Allahabad High Court single bench of Justice Shekhar B. Saraf held that the arbitral tribunal cannot recall or modify its award under Section 33 of the Arbitration and Conciliation Act, 1996. It held that none of the provisions of the Arbitration and Conciliation Act, of 1996, give the arbitral tribunal the power to recall and modify its award. It held that any act which the...
The Allahabad High Court single bench of Justice Shekhar B. Saraf held that the arbitral tribunal cannot recall or modify its award under Section 33 of the Arbitration and Conciliation Act, 1996. It held that none of the provisions of the Arbitration and Conciliation Act, of 1996, give the arbitral tribunal the power to recall and modify its award. It held that any act which the arbitral tribunal is not empowered to do under the Arbitration Act is void ab initio.
The bench held that:
“What is clear from the aforesaid provision is that the arbitral tribunal can only correct and interpret an award. An additional award can be made, only in respect of claims which have been omitted from the arbitral award. Interpretation of the award and additional award can be made only upon a request received by a party. However, correction can be done by the arbitral tribunal on its own within thirty days from the date of the arbitral award. However, none of these provisions, give the arbitral tribunal the power to recall and modify its award. Arbitral tribunals are not courts of law which are bestowed with inherent powers. Arbitrators are required to act within the confines of the arbitration agreement, and the framework enshrined in the Arbitration Act. Any act which the arbitral tribunal is not empowered to do under the Arbitration Act is void ab initio.”
Section 33 of the Arbitration and Conciliation Act, 1996:
"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 request made under subsection (1) to be justified, it shall make the correction or give the interpretation within thirty days from the receipt of the request and the interpretation shall form part of the arbitral award.
(3) The arbitral tribunal may correct any error of the type referred to in clause (a) of subsection (1), on its own initiative, within thirty days from the date of the arbitral award.
(4) Unless otherwise agreed by the parties, a party with notice to the other party, may request, within thirty days from the receipt of the arbitral award, the arbitral tribunal to make an additional arbitral award as to claims presented in the arbitral proceedings but omitted from the arbitral award.
(5) If the arbitral tribunal considers the request made under subsection (4) to be justified, it shall make the additional arbitral award within sixty days from the receipt of such request.
(6) The arbitral tribunal may extend, if necessary, the period of time within which it shall make a correction, give an interpretation, or make an additional arbitral award under subsection (2) or subsection (5).
(7) Section 31 shall apply to a correction or interpretation of the arbitral award or to an additional arbitral award made under this section."
Brief Facts:
The matter pertained to a notification issued under Section 3A(1) of the National Highways Act, 1956 for the acquisition of land to widen NH-29 between Varanasi – Gorakhpur. Following the notification, objections were solicited via publication in newspapers on March 6, 2015, and an award was issued on August 17, 2016.
Challenging the award, the opposite parties filed objections before the Arbitrator under Section 3G(5) of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”). Subsequently, the Arbitrator set aside the award on March 15, 2018, directing a re-evaluation by a Joint Committee, including NHAI officers, to determine compensation.
Later, the NHAI agreed to payment in three slabs based on area. However, subsequent awards were passed altering the payment terms, leading to objections by NHAI under Section 34 of the Arbitration Act, involving 53 persons/landholders in one case. District Judge rejected NHAI's objection. Feeling aggrieved, the Appellant approached the Allahabad High Court (“High Court”) and filed an appeal under Section 37 of the Arbitration Act.
Observations by the High Court:
The High Court referred to Section 33 of the Arbitration Act, which delineates the Correction and interpretation of awards, as well as the making of an additional award. The provision succinctly outlines the parameters within which an arbitral tribunal can operate after the issuance of an award. Specifically, it delineates that a tribunal may correct any errors within a designated timeframe, entertain requests for interpretation, or consider requests for an additional award concerning claims omitted from the initial arbitral award.
The High Court held that it is evident from the provision that the arbitral tribunal's authority is circumscribed to correcting errors and interpreting the award. The discretion to make an additional award is tethered solely to claims omitted from the initial award. Importantly, the initiation of correction or interpretation must be precipitated by a party's request. However, correction, under certain circumstances, can be undertaken autonomously by the arbitral tribunal within a stipulated timeframe. Notably, it held that none of these provisions bestows upon the arbitral tribunal the power to recall and modify its award which signifies the absence of inherent powers akin to those vested in courts of law.
The High Court held that arbitral tribunals, in essence, are bound by the confines of the arbitration agreement and the statutory framework delineated in the Arbitration Act. Their authority, encapsulated within the principle of kompetenz-kompetenz, underscores the tribunal's duty to ascertain its jurisdiction within the prescribed legal parameters. However, this authority is not boundless; it does not extend to revisiting the merits of the dispute or reconsidering substantive issues post the rendering of the award. It held that the doctrine of functus officio dictates that once an award is pronounced, the tribunal's jurisdiction over the matter is extinguished, barring specific statutory provisions to the contrary.
Therefore, the High Court held that the Arbitrator erred in passing the awards as the statutory provisions do not empower the arbitral tribunal to review or modify its award. Consequently, these orders are deemed void ab initio and warrant annulment.
Additionally, the High Court directed the Arbitrator appointed by the Central Government under the Act to conduct a de novo adjudication of the matter within a period of six months from the date of receipt of a certified copy of the order.
Case Title: National Highways Authority Of India Vs Musafir And Others
Case Number: APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 41 of 2021
Advocate for the Appellant: Divakar Rai Sharma
Advocate for the Respondent: Ashish Kumar Singh and Dharamveer Singh