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Supreme Court Of India

(From : Bombay)*

Hon'ble Judge(s): M. B. Shah, Arun Kumar , JJ

(A) Arbitration and Conciliation Act (26 of 1996) , S.34, S.24, S.28, S.31(3)— Arbitral award - Setting aside - Court's jurisdiction - Award contrary to provisions of substantive law or Act or terms of contract - Can be set aside. If the award is contrary to the substantive provisions of law or the provisions of the Act or against the terms of the contract, it would be patently illegal, which could be interfered under S. 34. However, such failure of procedure should be patent affecting the rights of the parties. (Para 14) Section 24 provides for hearing of the parties. Under sub-section (1)(a) of S. 28 there is a mandate to the arbitral Tribunal to decide the dispute in accordance with the substantive law for the time being in force in India. Admittedly, substantive law would include the Indian Contract Act, the Transfer of Property Act and other such laws in force. Under sub-section (3), arbitral Tribunal is directed to decide the dispute in accordance with the terms of the contract and also after taking into account the usage of the trade applicable to the transaction. Under S. 31(3) the award has to be reasoned. The question is whether the award could be set aside, if the arbitral Tribunal has not followed the mandatory procedure prescribed under Ss. 24, 28 or 31(3), which affects the rights....