Report No. 176
(29) Section 34: This Section deals with applications to set aside the award. The section is proposed to be amended to fill up certain omissions and also to provide for some consequential amendments arising out of the proposed section 34A, regarding which details are given under serial No.30.
(i) Sub-Section (1) of Section 34: This sub-section is proposed to be amended by permitting the parties to include, in their application to set aside the award, the additional grounds proposed in Section 34 A in the case of purely domestic arbitration awards relating to Indian nationals.
(ii) Explanation 2 below Section 34: Section 34 does not enable the parties to question the decision of the arbitral tribunal made under Section 13 (2) rejecting a plea of bias or to question the decision of the said tribunal made under Section 16 (2) or (3) rejecting a plea of want of jurisdiction on the part of the arbitral tribunal.
Though the existence of these remedies was referred to in Sections 13 and 16, these remedies were not included in Section 34 and further the use of the word 'only' in section 34 (1) contradicted what was stated in sections 13 and 16. This is being rectified by adding Explanation - 2 below sub-section 2 of Section 34, making it clear that the above decisions can be challenged before the court in the application under section 34(1).
(iii) Sub-Section (1A): We proposed to introduce sub-section (1A) in section 34 so that while filing an application to set aside the award, the parties could annex a photocopy of the award in case the original award has not been supplied to the applicant.
(iv) Sub-Section (5) and (6): These sub-sections are proposed to be introduced to refer to the further procedure subsequent to sub-section (4), namely, after receipt of the order of the arbitral tribunal to which the award is remitted for rectification of the defects pointed out in the application filed under sub-section (1) of Section 34.
The further procedure that is proposed is that parties can filed objections to the order of the tribunal passed upon such remission, and it is further provided that the Court can deal with the said objections also in the light of the grounds permissible under Section 34 and under the proposed Section 34A.
(30) Section 34A: In the case of purely domestic arbitrations, where an award is passed between Indian nationals, the parties are proposed to be given two more additional grounds of attack to be included in the application under sub-Section (1) of Section 34.
These two additional grounds are (i) that there is an error which is apparent on the face of the arbitral award giving rise to a substantial question of law, and (ii) that the award has not given reasons though it was an award which was required to contain reasons, not being one by way of settlement or one where the agreement provided that reasons need not be given.
In the case of additional ground (i) referred to above, special conditions are imposed, namely, that the party must file an application seeking leave to raise the said ground and satisfy the Court prima facie that such a point was raised before the arbitral tribunal, that the point affects the rights of the parties substantially, and that it is proper to decide the question.
The application under Section 34 (1) must specifically indicate the substantial question raised. Sub-section (3) of the proposed Section 34 A states that additional ground (i) will not be available where a specific question of law was referred to the arbitral tribunal.