Arbitration Award: Remedies Available to an Aggrieved Party

Under the Arbitration and Conciliation Act, 1996, an arbitral award is intended to be final and binding. However, to prevent a miscarriage of justice, the law provides specific, limited remedies to an aggrieved party. These remedies are not "appeals" in the traditional sense, as the court generally does not interfere with the merits of the tribunal's decision.

The primary remedies available are as follows:

1. Correction and Interpretation of the Award (Section 33)

Before approaching a court, a party can ask the Arbitral Tribunal itself to fix minor errors. Within 30 days of receiving the award:

• Correction: A party can request the tribunal to correct any computation, clerical, typographical, or similar errors.

• Interpretation: If agreed by the parties, a party can request the tribunal to give an interpretation of a specific point or part of the award.

• Additional Award: If the tribunal omitted a claim that was presented during the proceedings, a party can request an additional award for that specific claim.

2. Setting Aside the Arbitral Award (Section 34)

This is the most significant remedy. An aggrieved party can apply to a Civil Court (High Court or District Court) to have the award "set aside" or declared void. However, the court can only do this on narrow grounds:

• Procedural Grounds: Lack of proper notice, the party was unable to present their case, or the tribunal was not composed as per the agreement.

• Jurisdictional Grounds: The dispute was not covered by the arbitration agreement.

• Public Policy: The award was induced by fraud or corruption, or it conflicts with the Fundamental Policy of Indian Law or basic notions of morality and justice.

• Patent Illegality: For domestic awards, if there is an error of law apparent on the face of the record (this does not apply to International Commercial Arbitrations).

3. Appeals against Court Orders (Section 37)

While you cannot usually appeal the award itself to a higher court, you can appeal certain orders passed by a court regarding the arbitration. An appeal lies to the authorized higher court against:

• An order granting or refusing to set aside an arbitral award under Section 34.

• An order granting or refusing to grant interim measures under Section 9.

• An order refusing to refer parties to arbitration under Section 8.

Note: There is no "second appeal" allowed from an order passed in an appeal under Section 37. However, the right to approach the Supreme Court via a Special Leave Petition (SLP) remains.

4. Stay of Enforcement (Section 36)

If the winning party tries to execute the award like a court decree, the aggrieved party must specifically apply for a "Stay of Operation."

• Simply filing a challenge under Section 34 does not automatically stay the award.

• The court may grant a stay subject to conditions, such as depositing a portion of the awarded money in court.

• Unconditional Stay: If the court is satisfied that the arbitration agreement or the making of the award was induced by fraud or corruption, it shall grant an unconditional stay.