Case Note & Summary
The appellant, Geojit Financial Services Limited (now Geojit BNP Paribas Financial Services Limited), a stock broker registered with the National Stock Exchange of India Limited, entered into member-client agreements with the respondents for trading in shares and derivatives. Disputes arose, and the matter was referred to arbitration. The arbitral tribunal passed an award on 24 September 2008. The respondents filed petitions under Section 34 of the Arbitration and Conciliation Act, 1996, challenging the award. A learned Single Judge of the Bombay High Court, by judgment dated 17 September 2012, set aside the award and remanded the matter to the tribunal for reconsideration on all issues, keeping all points open and directing the tribunal to give opportunity to all parties. The appellant appealed against this order. The Division Bench heard all appeals together. The core legal issue was whether a court under Section 34 of the Arbitration and Conciliation Act, 1996, has the power to set aside an arbitral award and remand the matter to the arbitral tribunal for fresh consideration. The appellant argued that Section 34 does not confer any power of remand; the court can only uphold, modify, or set aside the award. The respondents supported the Single Judge's order. The court analyzed Section 34 and held that the scheme of the Act does not provide for a remand. The court noted that the only remedies under Section 34 are to uphold, modify, or set aside the award. The court distinguished between setting aside an award and remanding it, stating that setting aside terminates the proceedings, while remand keeps them alive. The court concluded that the Single Judge exceeded its jurisdiction by remanding the matter. The court allowed the appeals, set aside the Single Judge's order, and restored the arbitration petitions to the file of the learned Single Judge for fresh disposal in accordance with law. The court directed that the petitions be heard afresh and disposed of expeditiously.
Headnote
A) Arbitration Law - Power of Court under Section 34 - Remand - Section 34 of the Arbitration and Conciliation Act, 1996 - The court under Section 34 does not have the power to set aside an arbitral award and remand the matter to the arbitral tribunal for fresh consideration on all issues. The only remedies available under Section 34 are to uphold, modify, or set aside the award. Remand is not a remedy provided under the Act. The court cannot direct the tribunal to reconsider the case after giving opportunity to parties, as that would amount to a remand which is not permissible. (Paras 5-10).
Issue of Consideration
Whether a court under Section 34 of the Arbitration and Conciliation Act, 1996, has the power to set aside an arbitral award and remand the matter to the arbitral tribunal for fresh consideration on all issues.
Final Decision
The appeals are allowed. The impugned order of the learned Single Judge dated 17 September 2012 is set aside. The arbitration petitions are restored to the file of the learned Single Judge for fresh disposal in accordance with law. The learned Single Judge is requested to dispose of the petitions expeditiously.
Law Points
- Section 34 of the Arbitration and Conciliation Act
- 1996
- does not confer power to set aside an arbitral award and remand the matter for fresh consideration unless the award is found to be void or inoperative
- the court can only uphold
- modify
- or set aside the award
- remand is not a remedy under Section 34.
