Business Laws

Limited power

K K Balu | Updated on February 07, 2021 Published on February 07, 2021

In a recent decision in the case of Eliyamma Vs Deputy Director, a division bench of Kerala High Court said that the courts do not have the power to correct orders of the arbitrator—they can only set aside an arbitral award

In a recent decision in the case of Eliyamma Vs Deputy Director, a division bench of Kerala High Court said that the courts do not have the power to correct orders of the arbitrator—they can only set aside an arbitral award. The powers given to the court under Section 34 of the Arbitration Act is only supervisory in nature.

The present case is an appeal preferred under Section 37(1)(c) of the Act in which the correctness of the order of the District Judge passed under Section 34 of the Act on petition in arbitration proceedings was challenged. The arbitration proceedings were related to granting the compensation to the appellants in regard to their property being acquired by the National Highway Authority of India (respondents) for widening of a highway.

Not satisfied with the compensation offered by NHAI as well as the grant of enhancement by the arbitrator, the appellants moved the District Court under Section 34 of the Act, which refused to interfere and dismissed the petition.

The appellants then moved the High Court seeking opportunity to prove the prevailing market value of the land and for quantifying the other damage suffered by them.

Dismissing the prayer of appellants, the Court held that the arbitrator is the sole judge of the quality as well as the quantity of the evidence and that the legislative intent of the Act is to keep the supervisory role of the Court at its nadir.

Although, the petition was partially allowed on the ground that the appellants were not paid solatium and interest on solatium as per provisions related to Land Acquisition Act, 1894 which is also applicable on the acquisitions made by NHAI the essence of the judgment lays on the point that there can be no remanding back the matter to arbitrator by the Court under Section 34 as the Court lacks such power – if such an order is been passed, it would be void.

(The author is Senior Advisor at AK Mylsamy & Associates)

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Published on February 07, 2021
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