The Division Bench of the Supreme Court of India comprising of justices R. Subhash Reddy and Hrishikesh Roy, recently held that Section 34(4) of the Arbitration and conciliation Act, 1996 itself makes it clear that it is the discretion vested with the Court for remitting the matter to Arbitral Tribunal to give an opportunity to resume the proceedings or not.
The bench noted that the words “where it is appropriate” itself indicate that it is the discretion to be exercised by the Court, to remit the matter when requested by a party. When an application was filed under Section 34(4) of the Arbitration and conciliation Act, 1996, the same was to be considered keeping in mind the grounds raised in the application under Section 34(1) of the Arbitration and conciliation Act, 1996 by the party, who had questioned the award of the Arbitral Tribunal and the grounds raised in the application filed under Section 34(4) of the Act and the reply thereto.
Merely because an application was filed under Section 34(4) of the Arbitration and conciliation Act, 1996 by a party, it was not always obligatory on the part of the Court to remit the matter to Arbitral Tribunal. The discretionary power conferred under Section 34(4) of the Arbitration and conciliation Act, 1996, was to be exercised where there was inadequate reasoning or to fill up the gaps in the reasoning, in support of the findings which were already recorded in the award.
Under the guise of additional reasons and filling up the gaps in the reasoning, no award could be remitted to the Arbitrator, where there were no findings on the contentious issues in the award. If there were no findings on the contentious issues in the award or if any findings were recorded ignoring the material evidence on record, the same were acceptable grounds for setting aside the award itself. Under the guise of either additional reasons or filling up the gaps in the reasoning, the power conferred on the Court could not in the award.
But at the same time, when it prima facie appeared that there was patent illegality in the award itself, by not recording a finding on a contentious issue, in such cases, Court may not accede to the request of a party for giving an opportunity to the Arbitral Tribunal to resume the arbitral proceedings.
Further, as rightly contended by the learned counsel appearing for the respondent, that on the plea of ‘accord and satisfaction’ on further consideration of the evidence, which was ignored earlier, even if the arbitral tribunal wants to consciously hold that there was ‘accord and satisfaction’ between the parties, it could not do so by altering the award itself, which he had already passed.
For the above reasons, the Apex Court did not find any merit in this appeal.
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