Report No. 176

Additional grounds of challenge in case of certain awards

"34A. (1) In the case of an arbitral award made in an arbitration other than an international arbitration (whether commercial or not), recourse to the following additional grounds can be had in an application for setting aside an award referred to in sub-section (1) of section 34, namely:-

(a) that there is an error which is apparent on the face of the arbitral award giving rise to a substantial question of law;

(b) that the arbitral award is an award in respect of which reasons have to be given under sub-section (3) of section 31 but the arbitral award does not state the reasons.

(2) Where the ground referred to in clause (a) of sub-section (1) is invoked in the application filed under sub-section (1) of section 34, the applicant shall file a separate application seeking leave of the court to raise the said ground:

Provided that the court shall not grant leave unless it is prima facie of the opinion that all the following conditions are satisfied, namely:-

(a) that the determination of the question will substantially affect the rights of one or more parties;

(b) that the substantial question of law was one which the arbitral tribunal was asked to decide; and

(c) that the application made for leave identifies the substantial question of law to be decided and states relevant grounds on which leave is to be granted.

(3) Where a specific question of law has been referred to the arbitral tribunal, an award shall not be set aside on the ground referred to in clause (a) of sub-section (1).".