● request must be made within 30 days
● tribunal issues additional award within 60 days.
Purpose:
To ensure all claims raised in arbitration are properly decided.
Module 3
1. Application for Setting Aside Arbitral Award
(Section 34)
Meaning
An Arbitral Award is the final decision of the arbitral tribunal. However, if a party is dissatisfied, it
may apply to the court to set aside (cancel) the award.
Setting aside means declaring the arbitral award invalid by the court.
Section 34 provides the only method to challenge an arbitral award in India.
Grounds for Setting Aside Arbitral Award
1. Incapacity of a Party
If a party to the arbitration agreement was legally incapable (minor, unsound mind, etc.).
2. Invalid Arbitration Agreement
If the arbitration agreement itself is invalid under law.
3. Lack of Proper Notice
If the party did not receive proper notice of the arbitration proceedings or was unable to
present its case.
4. Award Beyond Scope of Arbitration
If the arbitrator decides issues not covered by the arbitration agreement.
5. Improper Composition of Tribunal
If the arbitral tribunal was not constituted according to the agreement or the Act.
6. Subject Matter Not Arbitrable
Certain disputes cannot be resolved through arbitration, such as:
● criminal matters
● matrimonial disputes
● insolvency matters
● testamentary matters
7. Award Contrary to Public Policy of India
An award may be set aside if it is against:
● fundamental policy of Indian law
● interests of India
● justice or morality
Important Case Law
ONGC Ltd v. Saw Pipes Ltd
The Supreme Court expanded the meaning of public policy as a ground for setting aside an
arbitral award.
Time Limit for Application
Application must be filed within:
3 months from the date of receiving the award
The court may allow additional 30 days if sufficient cause is shown.
2. Finality and Enforcement of Arbitral Award
(Sections 35–36)
Finality of Arbitral Award (Section 35)
An arbitral award is final and binding on the parties.
Once the award is passed:
● parties must comply with it
● tribunal becomes functus officio (has no further authority except limited corrections)
Enforcement of Arbitral Award (Section 36)
If a party does not voluntarily comply with the award, the other party may apply to the court for
enforcement.
The arbitral award is enforced in the same manner as a decree of a civil court.
Important Case
BCCI v. Kochi Cricket Pvt Ltd
The Court clarified the enforcement of arbitral awards under amended Section 36.
3. Appealable Orders
(Section 37)
Section 37 specifies the orders against which an appeal can be filed.
Appeals can be filed against:
1. Refusal to refer parties to arbitration (Section 8)
2. Granting or refusing interim measures (Section 9)
3. Setting aside or refusing to set aside arbitral award (Section 34)
Appeal from Arbitral Tribunal
Appeal may also lie against tribunal orders:
1. Acceptance of plea that tribunal has no jurisdiction
2. Granting or refusing interim measures under Section 17
No second appeal is allowed except appeal to Supreme Court in certain cases.
4. Miscellaneous Provisions
(Sections 38–43)
These provisions regulate costs, jurisdiction, limitations, and other administrative matters.
5. Deposits
(Section 38)
The arbitral tribunal may require parties to deposit advance money to cover:
● arbitrator’s fees
● administrative expenses
● arbitration costs
If a party fails to deposit its share, the other party may pay the amount.
If deposits are not made, the tribunal may terminate the proceedings.
6. Lien on Arbitral Award and Deposits as to Costs
(Section 39)
Arbitrators have the right to retain (hold) the arbitral award until their fees and costs are paid.
This right is called lien on arbitral award.
Purpose:
To ensure arbitrators receive their fees and expenses.
7. Arbitration Agreement Not Discharged by Death of Party
(Section 40)
If a party to the arbitration agreement dies:
● the arbitration agreement does not become invalid
● legal representatives of the deceased party are bound by the agreement
Thus arbitration continues with legal heirs of the deceased party.
8. Provisions in Case of Insolvency
(Section 41)
If a party becomes insolvent:
● the arbitration agreement remains valid
● arbitration proceedings may continue
However, proceedings may be affected depending on insolvency laws.
9. Jurisdiction
(Section 42)
Section 42 provides that once a court has jurisdiction over arbitration proceedings, no other
court can entertain the matter.
This prevents:
● multiple court proceedings
● conflicting decisions
Example
If the first application related to arbitration is filed in Delhi High Court, then all subsequent
applications must also be filed there.
10. Limitations
(Section 43)
The Limitation Act, 1963 applies to arbitration proceedings.
Important rules:
● arbitration is treated similar to civil suits for limitation purposes
● limitation period begins when cause of action arises
Important Case
State of Goa v. Praveen Enterprises
Court clarified the application of limitation rules in arbitration proceedings.
11. Enforcement of Certain Foreign Awards
Foreign arbitral awards are governed by Part II of the Arbitration and Conciliation Act, 1996.
India recognizes foreign awards under:
1. New York Convention (1958)
2. Geneva Convention (1927)
Enforcement of Foreign Awards
A foreign award can be enforced in India if:
1. it is made in a recognized convention country
2. it arises from a commercial dispute
3. it is final and binding
Grounds for Refusing Enforcement
Court may refuse enforcement if:
● arbitration agreement was invalid
● proper notice was not given
● award exceeds scope of arbitration
● enforcement violates public policy of India
Important Case
Renusagar Power Co Ltd v General Electric Co
Supreme Court explained public policy as a ground for refusing enforcement of foreign
awards.
Module 4