Recourse To Section 34(4) Of The A&C Act Can Only Be Taken For Curable Defects, Courts Cannot Allow The Tribunal To Either Review Or Reconsider The Award: Delhi High Court

The bench of Justice Yashwant Varma has clarified the scope and extent of Section 34(4) of the Act. It held that the structure of Section 34(4) is limited to an opportunity being afforded to the AT to get rid the defects which are manifest and can be remedied without the foundation of the award or the various findings and conclusions recorded therein being impacted. The remit to the AT in terms of the said provision also cannot be read as a conferral of authority on the AT to reconsider or modify a finding and which may entail what in legal terms is alluded to as a “merit review”.

The Court held that Section 34(4) is curative in nature and is to be used in certain circumstances to allow tribunal to remove procedural defects, however, if the award suffer from any of the illegalities which are spelt out in Section 34(2) (a) or (b), it must suffer the fate of being set aside and cannot be saved with the aid of Section 34(4).

The discussion on the history and legislative intent of Section 34(4) of the Act

In its pursuit of clarifying the ambit of power under Section 34(4) of the Act, the Court delved into the provision's historical evolution. Scrutinizing the drafts discussed by the Working Group of UNCITRAL and the ensuing dialogues, the Court discerned a consistent trajectory.

The Court observed that during the Sixth Session, Article 30(3) emerged, resembling the current Section 34(4). This provision aimed to empower courts to continue arbitral proceedings at a party's request, allowing the Arbitral Tribunal (AT) to rectify procedural defects. The consensus highlighted Article 30(3)'s utility in curbing annulments.

Further it observed that in the Seventh Session, Article 34(4) took shape, echoing the concept of limited remission. It empowered courts to remit awards for fixable procedural flaws, avoiding complete annulments. The Court found this as a pragmatic approach.

The Court also referred to Travaux Préparatoires of the UNCITRAL Working Group and observed that it reflected a recurring sentiment endorsing courts' power to remit awards for curable defects.

The Court also referred to the decision of the Hon’ble Supreme Court in Kinnari Mullick v. Ghanshyam Das Damani^[1] wherein the Court observed that Section 34(4) permits remission only in cases of curable defects. Further it referred to decisions of the Apex Court in Dyna Technologies v. Crompton Greaves^[2] and I-Pay Cleaning Services v. ICICI Bank^[3] to reiterate that Section 34(4) is not intended to allow the tribunal to have a review of the award.

The Court also referred to the decision of the Singapore Court of Appeals in AKN v. ALC^[4] wherein it was held that Section 34(4) of the Model Law was intended to preserve national courts’ option to remit an award where it was deemed appropriate but it would not be used by the Court to allow the tribunal to have a relook at the award.

The Court held that the modification of the award by the Court under Section 34(2) as prohibited by the Apex Court in M. Hakeem would equally apply to modification of the award by the tribunal.

Case Title: NHAI v. Trichy Thanjavur Expressway Ltd

Citation: 2023 LiveLaw (Del) 742

Date: 21.08.2023

Counsel for the Petitioner: Mr. Santosh Kumar, Standing Counsel with Mr. Daksh Arora, Mr. Manish K. Bishnoi and Ms. Pallavi Singh Bishnoi, Advs.

Counsel for the Respondent: Ms. Kaadambari, Mr. Pankaj Agarwala, Mr. Sahil Khanna, Ms. Ayushi and Mr. Amir Zaidi, Advs.

Counsel Assisting the Court: - Dr. Amit George, Adv, Mr. Gautam Narayan and Ms. Asmita Singh, Advs. Mr. Gaurav Pachnanda, Sr. Adv. with Ms. Nikita Jaitly and Ms. Anvi Sharma, Advs. Mr. Ramesh Singh, Sr. Adv. Mr. Rajshekhar Rao, Sr. Adv. with Ms. Mansi Sood and Mr. Areeb Amanullah, Advs. Mr. Ciccu Mukhopadhyay, Sr. Adv. with Mr. Rishi Agarwala, Ms. Shruti Arora, Mr. KaranVir Singh, Adv. Mr. Dayan Krishnan, Sr. Adv. with Mr. Rishi Agarwala, Mr. Shreedhar Kale, Mr. Sanjeevi Seshadri, Ms. Shruti Arora, Mr. Karan Vir, Advs. Mr. Saurabh Banerjee, Sr. Adv. with Mr. Yashwardhan, Ms. Anjali Dwivedi, Mr. Rakesh T., Mr. T.S. Sundaram, Mr. S.P. Mukherjee, Advs. Mr. George Pothan, Ms. Manisha Singh, Mr. Ashu Pathak and Ms. Jyoti Singh, Advs. Mr. Ashim Sood, Adv. Ms. Aarzoo Aneja, Adv. Mr. R.A. Iyer, Adv. Mr. Arjun Natarajan and Ms. Kamana Pradhan, Advs, Adv. Mr. Rohan J Alva, Adv. Mr. Karan Aggarwal, Adv. Dr. Shashwat Bajpai, Mr. Akshay Anurag and Ms. Sanjana Sachdev, Advs. Mr. Zafar Khurshid, Mr. Amit Singh Chauhan and Mr. Abhishek Sharma, Advs. Mr. Manish Bishni, Mr. Nirmal Prasad, Adv. Mr. Karan Agarwal, Adv. Mr. Anurag Ojha and Mr. Udit Nagar, Advs. Mr. Karn bhardwaj, Adv. Mr. Naushad Ahmed Khan, Adv. Ms. Payal Chawla and Ms. Hina Shaheen, Advs. Mr. Amit Gupta, Adv. Mr. Mozzam Khan, Adv. Mr. Manish Bishnoi, Adv.

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