In the captioned matter the Hon’ble Kerala High Court discussed about the availability of recourse under section 34(4) of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) and scope of interference with award of arbitrator appointed under National Highways Act, 1956 (“NHA 1956”).
Facts in brief
The land owned by the appellants were acquired under NHA 56. The compensation amount payable to the appellants was fixed by the competent authority. The appellants took recourse to arbitration proceeding as provided in the NHA, 1956 and the arbitrator enhanced the amount of compensation payable to the appellants. The appellants challenged the award passed by the arbitrator by filing applications before the District Court under section 34 (1) of the Arbitration Act. The District court dismissed the applications. On appeal, the appellant prayed that the matter may be remanded to the District Court to enable the appellants to take necessary steps under Section 34(4) of the Arbitration Act and to adduce evidence regarding enhanced compensation.
Judgment and Analysis
The Hon’ble Kerala High Court observed that, “…The court exercising the power under Section 34 of the Arbitration Act cannot remit an award to the arbitral tribunal. It can only defer proceedings for a period of time, that too, upon a written request by one of the parties, under Section 34(4) of the Arbitration Act, in order to give the arbitral tribunal an opportunity to eliminate the grounds for setting aside the award.” It went on to further observe that, “The limited discretion available to the court under Section 34(4) of the Arbitration Act can be exercised only upon a written application made in that behalf by a party to the arbitration proceedings and that the court cannot exercise this limited power of deferring the proceedings before it suo motu.”
With regard to scope of interference with such an award, the Court observed that, “21. When the award of an arbitrator appointed under the National Highways Act is challenged in an application filed under Section 34(1) of the Arbitration Act, the power of the court to interfere with such award is very limited. The court cannot consider the application filed under Section 34(1) of the Arbitration Act as a reference made under Section 18 of the Land Acquisition Act, 1894 and direct payment of compensation at an enhanced rate. The award of the arbitrator can be set aside only on the grounds mentioned under Section 34(2) of the Arbitration Act and not otherwise.”
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