The court u/s. 34 of the Arbitration and Conciliation Act, 1996 has no power to modify an award passed by the Arbitrator in an arbitration proceedings
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The Supreme Court in a recent decision, dated 11-08-2023 in M/s. Larsen Air Conditioning & Refrigeration Co. v. Union of India (CA No. 3798/2023) has held that, the court u/s. 34 of the Arbitration and Conciliation Act, 1996 has no power to modify an award passed by the Arbitrator in an arbitration proceedings but the court can only set aside an award partially or wholly on a finding that conditions spelt of u/s. 34 have been established. The limited and extremely circumscribed jurisdiction of the court u/s. 34 of the Act, permits the court to interfere with an award, sans the ground of patent illegality, i.e., that illegality must go to the root of the matter and cannot be of trivial nature” and that the Tribunal must decide in accordance with the terms of the contract, but if an Arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground. The other ground would be denial of natural justice. The Apex Court pointed out that the old Arbitration Act contained a provision which enabled the court to modify an award. However, that power has been consciously omitted by the parliament while enacting the present Arbitration Act. This means that the parliamentary intent was to exclude power to modify an award, in any manner, to the court.
