Appellate Court can only set aside or remand an Arbitral award, it cannot modify the same: SC

The Supreme Court on Tuesday while hearing a case of Section 34 of Arbitration Act, 1996 held that an award cannot be modified by the Appellate Court.

In the present case, an appeal was filed by National Highway Authority of India against the judgment given by the Madras High Court with regard to an arbitral award.

The appeal sought to modify the arbitral award made under the National Highways Act, 1956 in order to increase the compensation awarded by the Arbitrator.

The primary issue of the appeal was whether Section 34 of Arbitration and Conciliation Act, 1996 includes the power to modify an award. The bench took into account the wordings of the Section 34 and observed that it only gives the power to set aside an award on very limited grounds. It further referred to Section 15 and 16 of the Arbitration Act, 1940 which gives the power to modify an award on limited grounds given in the said section but Section 34 proceedings do not contain any challenge on the merits of the award.

The bench headed by Justices RF Nariman and BR Gavai observed that if the power to modify an award is to be used it would be an exercise of power beyond the limits. It noted that the Parliament with a vivid intention did not include the power to modify and award under Section 34 of the Arbitration Act, 1996.

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