The Delhi High Court recently ruled that once a Section 34 petition under the Arbitration and Conciliation Act (A&C Act) has received a final order, the court cannot entertain applications seeking modification. Justices Yashwant Varma and Ravinder Dudeja overturned a prior order where the court had modified its earlier decision under Section 34 in response to the respondent's application.
In a case involving a Section 34 petition, a Single Judge had partially allowed it on December 12, 2018, reducing the Arbitral Tribunal's awarded interest rate from 18% to 12%. The court limited interest application from the cause of action accrual to the arbitration invocation, and the appellant did not appeal this decision.
Post the Section 34 petition's disposal, the respondent filed a modification application for the December 12, 2018, order. Surprisingly, the court admitted the modification application, leading to an August 8, 2019, order that further altered the award, denying the interest claim. Discontent, the appellant appealed under Section 37 of the A&C Act.
The court clarified that the appellant wasn't responsible for misleading the Arbitral Tribunal into granting 18% interest; the Tribunal based its decision on unchallenged communications between the parties. The appellant opposed altering the award in both the December 12, 2018, judgment and the subsequent August 8, 2019, order.
The court emphasized that the Section 34 petition conclusively decided on December 12, 2018, and the subsequent modification plea by the respondent after a final decision was inappropriate. The August 8, 2019, order wasn't a review but a new decision post a fresh hearing.
Next, the court delved into award modification, referencing Supreme Court principles. It highlighted the statutory shift from the 1940 Arbitration Act and Section 34's specific language. The December 12, 2018, order, according to the court, violated this legal position, rendering it unsustainable. It cited M decisions as supporting this stance.
Consequently, the court allowed the appeal, setting aside the December 12, 2018, and August 8, 2019, orders. The Section 34 petition was reinstated for reconsideration by the Single Judge.
In summary, the Delhi High Court's ruling underscores that once a Section 34 petition receives a final order, the court cannot entertain modification applications. The court clarified the appellant's innocence in influencing the Arbitral Tribunal's decision and emphasized the impropriety of modifying a conclusively decided petition. The judgment reflects the court's adherence to statutory changes and specific legal provisions while addressing award modification, ultimately reinstating the Section 34 petition for reconsideration.
TAGS: Delhi High Court Section 34 petition Arbitration and Conciliation Act modification application final order
