Order passed by Arbitrator on an application filed under Sec.33 of A&C Act & thereafter modifying original award, cannot be sustained: SC

Read Judgment: Gyan Prakash Arya vs. M/s Titan Industries Limited

Pankaj Bajpai

New Delhi, November 23, 2021: While referring to section 33 of the Arbitration & Conciliation Act, 1996, the Supreme Court has held that only in a case of arithmetical and/or clerical error, the arbitral award can be modified and such errors only can be corrected.

A Division Bench of Justice M.R. Shah and Justice B.V. Nagarathna therefore observed that the order passed by the arbitrator on an application filed u/s 33 of the Arbitration & Conciliation Act, 1996, and thereafter modifying the original award cannot be sustained.

The observation came pursuant to an appeal challenging the order passed by the City Civil Court as well as the High Court in upholding the order passed by the arbitrator allowing the application filed u/s 33 of the 1996 Act for modification of the award, since it was contended that there was no arithmetical error in the original award passed by the arbitrator. 

After considering the arguments, the Top Court observed that the original award was passed considering the claim made by the claimant as per its original claim and as per the statement of the claim made and therefore subsequently allowing the application u/s 33 of the 1996 Act to modify the original award in exercise of powers u/s 33 of the 1996 Act is not sustainable.

In the present case, it cannot be said that there was any arithmetical and/or clerical error in the original award passed by the arbitrator, added the Court. 

Speaking for the Bench, Justice Shah said that what was claimed by the original claimant in the statement of claim, was already awarded.

The order passed by the arbitrator in the application u/s 33 of the 1996 Act is beyond the scope and ambit of Section 33 of the 1996 Act, added Justice Shah. 

Therefore, the Apex Court concluded that both, the City Civil Court as well as the High Court had committed a grave error in dismissing the arbitration suit/appeal u/s 34 and 37 of the 1996 Act respectively. 

The modified award passed by the arbitrator allowing the application u/s 33 of the 1996 Act cannot be sustained and the same deserves to be quashed and set aside, added the Top Court.