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Report No. 76

5.17. Section .- Scope for improvement.-

We may now revert to the need for widening the scope of section 16-a matter which we have already discussed.1 It is to be noted that at present when an award which is defective in matters of substance is received by a court, then the only alternatives open to the court are to remit the award or to set it aside. Power to set aside the award (in contrast with the power of remission),2 is a drastic one, because the court may3 then supersede the reference, and direct that the agreement ceases to have effect with respect to the difference referred. Such a drastic action may not always be in conformity with the intentions of the parties.

It may lead to unnecessary litigation and, in some cases, to injustice. If this approach is correct, the power to remit should be worded widely rather than narrowly. In fact, this power in the earlier Act-Indian Arbitration Act, 1899, section 13-was very wide, because section 13(1) of that Act provided that "the court may, from time to time, remit the award to the reconsideration of the arbitrators or an umpire". There was no further limitation as to the grounds of remission. In the English Act also, the power is expressed as a power "to remit the matters referred or any of them" without any restriction as to grounds.

In illustration of the utility of a wide power of remission, it may be useful to refer to the situation of such "misconduct" on the part of the arbitrator as does not irresistibly lead to the conclusion that there has been any act involving moral turpitude. In fact, under the Act of 1899, judicial decisions accepted the proposition that where there has been misconduct on the part of the arbitrator, the court could remit the matter for re-consideration.4

1. Para. 5.10 to 5.13, supra.

2. Para. 5.6, supra.

3. Section 19.

4. U.M. Choudhury & Co. v. Jivan Krishna Ghose & Son, (1922) ILR 49 Cal 646.

Arbitration Act, 1940 Back

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