Case Note & Summary
The dispute arose from an agreement dated 9.7.2003 between the appellant and the respondent regarding the recovery of pure gold weighing 3648.80 grams. The respondent invoked the arbitration clause, leading to the appointment of a sole arbitrator who issued an award on 04.12.2010, directing the appellant to return the gold or pay its market value. The respondent later filed an application under Section 33 of the Arbitration and Conciliation Act, 1996, seeking to modify the award based on a claimed market value of Rs.20,747 per 10 grams instead of Rs.740 per gram. The arbitrator allowed this modification on 14.01.2011. The appellant challenged this modification through an arbitration suit under Section 34, which was dismissed by the City Civil Court, and subsequently, the High Court dismissed an appeal under Section 37. The appellant contended that the arbitrator exceeded his jurisdiction by modifying the award, arguing that there was no clerical or arithmetical error to justify such a change. The respondent's counsel acknowledged the difficulty in defending the modification but maintained that the original claim for the return of gold remained valid. The Supreme Court, upon reviewing the case, found that the modification was not permissible under Section 33 as it did not address any clerical or arithmetical error. The court concluded that both the City Civil Court and the High Court erred in upholding the arbitrator's modification. Consequently, the Supreme Court allowed the appeal, quashing the modified award and restoring the original award dated 04.12.2010, with no order as to costs.
Headnote
A) Arbitration - Modification of Award - Jurisdiction of Arbitrator - Section 33 Arbitration and Conciliation Act, 1996 - The learned arbitrator's modification of the original award was beyond the scope of Section 33 as there was no arithmetical or clerical error in the original award. The court held that the original award was based on the claim made by the claimant and thus the modification was not sustainable (Paras 12-12).
Issue of Consideration
Whether the learned arbitrator exceeded his jurisdiction under Section 33 of the Arbitration and Conciliation Act, 1996 in modifying the original award.
Final Decision
The Supreme Court allowed the appeal, quashed the modified award, and restored the original award dated 04.12.2010, with no order as to costs.
Law Points
- Arbitration
- Modification of Award
- Jurisdiction of Arbitrator
- Section 33 Arbitration and Conciliation Act
- 1996
