Arbitration Act: Important Judgments By Supreme Court In 2024

As the year 2024 nears its end, LiveLaw brings to you a summary of important Supreme Court judgments of the year rendered in connection with the Arbitration and Conciliation Act, 1996. The same are as follows:1. Arbitral Awards Cannot Be Modified Under Sections 34 & 37 Of Arbitration & Conciliation Act : Supreme CourtCase: S.V. Samudram v. State of Karnataka [2024 LiveLaw (SC) 14]In this case, a bench of Justices Abhay S Oka and Sanjay Karol reiterated that any attempt to “modify an award” while adjudicating Sections 34 and 37 petitions is not permissible under the Arbitration Act.2. Whether Courts Can Modify Arbitral Award U/S 34 or 37 of Arbitration Act? Supreme Court Refers To Larger BenchCase: Gayatri Balasamy v. M/s ISG Novasoft Technologies Limited [2024 LiveLaw (SC) 149]In this case, a bench comprising Justices Dipankar Dutta, KV Viswanathan and Sandeep Mehta referred to a larger bench the question whether courts have power to modify arbitral award under Sections 34 or 37 of the Arbitration Act. The Court referred following questions to the larger bench:“1. Whether the powers of the Court under section 34 and 37 of the Arbitration and Conciliation Act, 1996, will include the power to modify an arbitral award?2. If the power to modify the award is available, whether such power can be exercised only where the award is severable and a part thereof can be modified?3. Whether the power to set aside an award under section 34 of the Act, being a larger power, will include the power to modify an arbitral award and if so, to what extent?4. Whether the power to modify an award can be read into the power to set aside an award under section 34 of the Act?5. Whether the judgment of this Court in Project Director NHAI vs. M. Hakeem, followed in Larsen Air Conditioning and Refrigeration Company vs. Union of India and SV Samudram vs. State of Karnataka lay down the correct law, as other benches of two Judges (in Vedanta Limited vs. Shenzden Shandong Nuclear Power Construction Company Limited, Oriental Structural Engineers Pvt. Ltd. vs. State of Kerala and M.P. Power Generation Co. Ltd. vs. Ansaldo Energia Spa) and three Judges (in J.C. Budhraja vs. Chairman, Orissa Mining Corporation Ltd., Tata Hydroelectric Power Supply Co. Ltd. vs. Union of India and Shakti Nath vs. Alpha Tiger Cyprus Investment No.3 Ltd.) of this Court have either modified or accepted modification of the arbitral awards under consideration?”3. Parliament Should Consider Amending Arbitration Act To Prescribe Limitation Period To File S.11 Application : Supreme CourtCase: M/s Arif Azim Co Ltd v. M/S Aptech Ltd. [2024 LiveLaw (SC) 180]In this case, a bench comprising former CJI DY Chandrachud and Justices JB Pardiwala, Manoj Misra held that the Limitation Act, 1963 is applicable to proceedings for appointment of arbitrator under Section 11(6) of the Arbitration Act and a Court may refuse to make a reference if the claims, on the date of commencement of arbitration proceedings, are ex-facie barred.Since no specific time period is provided in the Limitation Act for Section 11(6) applications, the court identified Article 137 as the relevant provision, allowing a three-year limitation period from the accrual of the right to apply. It clarified that the limitation period would commence only after the right to apply had accrued.While recognizing the legislative vacuum, the court urged Parliament to consider amending the Act to prescribe a specific limitation period for filing applications under Section 11(6).4. General Reference Won't Have Effect Of Incorporating Arbitration Clause In Another Contract, Specific Reference Needed : Supreme CourtCase: NBCC (India) Limited v. Zillion Infra Projects Pvt. Ltd. [2024 LiveLaw (SC) 246]In this case, a bench comprising Justices BR Gavai and Sandeep Mehta reiterated that a dispute cannot be referred to arbitration based on the arbitration clause contained in another contract unless a specific reference was made in the main contract to incorporate the arbitration clause into the main contract.5. Enforcement Of Foreign Award Must Be Refused Only Rarely, International Standards To Be Applied To Determine Bias : Supreme CourtCase: Avitel Post Studioz Limited & Ors. v. HSBC PI Holdings (Mauritius) Limited [2024 LiveLaw (SC) 267]In this case, a bench of Justices Hrishikesh Roy and Prashant Kumar Mishra held that to determine the factor of arbitral bias, Court must endeavor to follow international standards than domestic ones. It is only in exceptional circumstances that enforcement of a foreign should be refused on the ground of bias, the Court said.6. Court Doesn't Sit In Appeal Over Arbitral Tribunal's Interpretation Of Contract : Supreme CourtCase: National Highway Authority of India v. M/s Hindustan Construction Company Ltd [2024 LiveLaw (SC) 361]In this case, a bench of Justices Abhay S Oka and Pankaj Mithal held that it is for the Arbitral Tribunal to adjudicate upon construction of terms of a contract and the...

Arbitration Act: Important Judgments By Supreme Court In 2024

Debby Jain

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