MAHARASHTRA NATIONAL LAW UNIVERSITY AURANGABAD

RECOURSE AGAINST ARBITRAL AWARDS

ALTERNATE DISPUTE RESOLUTION

V Semester

B.A.LL.B(Hons.)

Submitted by: Submitted to:

Kshemya R Nair Ms. Sakshi Gupta
Roll no. 34 (Assistant Professor Alternate Dispute Resolution)

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TABLE OF CONTENTS

(1) INTRODUCTION
(2) STATUTORY PROVISION FOR RECOURSE AGAINST ARBITRAL
AWARD
(3) BACKDROP OF SECTION 34
(4) INTERPRETATION OF SECTION 34
(5) ANALYSIS OF PUBLIC POLICY
(6) CRITICAL APRAISAL
(7) WHICH COURT HAS JURISDICTION TO SET ASIDE THE AWARD
(8) INSERTION OF SECTION 34A
(9) BIBLIOGRAPHY

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INTRODUCTION

The Arbitrator appointed under the Arbitration and Conciliation Act has to conduct arbitral
proceedings and finally has to make an award that is called as an arbitral award. The
reference of an arbitral award is made under the provision of section 31 of the Act. Award
means final determination of arbitral proceedings. Under the Act “Arbitral Award” includes
an interim award. The form and contents of an arbitral award shall be in writing and signed
by an arbitrator and also shall state reasons upon which it is based unless the parties have
agreed that no reasons are to be given. It shall also state its date and the place of arbitration in
accordance with section 20 of the Act. The copy of an order shall be delivered to each party.
Now the question arises that if a person is appointed as an arbitrator what and how much care
should be taken by him legally or otherwise under the provision of the Act or otherwise?

One has to understand thoroughly the answer of this question since arbitral award can be set
aside on the grounds enumerated in section 34 of the Act and if an award is made void then
the whole exercise of the object of the Act is nullified.

STATUTORY PROVISION FOR RECOURSE AGAINST ARBITRAL AWARD:

SECTION 34

Application for setting aside arbitral award.-

(1) Recourse to a Court against an arbitral award may be made only by an application for
setting aside such award in accordance with sub-section (2) and sub-section (3).
(2) An arbitral award may be set aside by the Court only if---
A. the party making the application furnishes proof that-----
I. a party was under some incapacity, or
II. the arbitration agreement is not valid under the law to which the parties
have subjected it or, failing any indication thereon, under the law for the
time being in force; or
III. the party making the application was not given proper notice of the
appointment of an arbitrator or of the arbitral proceedings or was
otherwise unable to present his case; or
IV. the arbitral award deals with a dispute not contemplated by or not falling
within the terms of the submission to arbitration, or it contains decisions
on matter beyond the scope of the submission to arbitration:

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Provided that, if the decisions on matters submitted to arbitration can be separated from those
not so submitted, only that part of the arbitral award which contains decisions on matters not
submitted to arbitration may be set aside; or

V. the composition of the arbitral tribunal or the arbitral procedure was not
in accordance with the agreement of the parties, unless such agreement
was in conflict with a provision of this Part from which the parties cannot
derogate, or, failing such agreement, was not in accordance with this Past;
or

B. the Court finds that------

I. the subject-matter of the dispute is not capable of settlement by
arbitration under the law for the time being in force, or
II. the arbitral award is in conflict with the public policy of India.

Explanation. ---Without prejudice to the generality of sub-clause (ii), it is hereby declared, for
the avoidance of any doubt, that an award is in conflict with the public policy of India if the
making of the award was induced of affected by fraud or corruption or was in violation of
section 75 or section 81.

(3) An application for setting aside may not be made after three months have elapsed from
the date on which the party making that application had received the arbitral award, or, if
a request had been made under section 33, from the date on which that request had been
disposed of by the arbitral tribunal:

Provided that if the Court is satisfied that the applicant was prevented by sufficient cause
from making the application within the said period of three months if may entertain the
application within a further period of thirty days, but not thereafter.

(4) On receipt of an application under sub-section (1), the Court may, where it is appropriate
and it is so requested by a party, adjourn the proceedings for a period of time determined
by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings
or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds
for setting aside the arbitral award.

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BACKDROP OF SECTION 34

The purpose of arbitration is to ensure effective, quick and consensual decision making
process avoiding the arduous process of courts. The need for such a procedure is greater in a
country like India where delay has ingrained itself as part of the system of administration of
justice. While arbitration is indeed a quick procedure, the interference by court in the process
acts as a clog to its development. The enactment of the Arbitration Act, 1940, was a
reflection of the legislature's determination to ensure speedy resolution of disputes. However,
the 1940 Act, though sound in principle, was bogged down by procedural delays. There was
no uniform procedure in terms of a unified code for the enforcement of foreign awards under
the New York Convention and the Geneva Convention. The Foreign Awards (Recognition
and Enforcement) Act, 1961 for the enforcement of arbitral awards under the New York
Convention and the Arbitration (Protocol and Convention), Act 1937 hitherto held the field.
With the adoption, by the United Nations Commission for International Trade Law of the
UNCITRAL Model Arbitration Law and the subsequent adoption of the same by various
countries in the world, it was but necessary that India adopt the Model Law to govern
arbitrations and this saw the genesis of the more dynamic Arbitration and Conciliation
Ordinance leading to the Arbitration and Conciliation Act, 1996. Whereas, the new Act of
1996, has consolidated and amended the law relating to arbitration and is comprehensive in
the sense that it covers both domestic and foreign arbitrations.

Section 30(a) of the Arbitration & Conciliation Act, 1940 opens with the restrictive wording:
“an arbitral award shall not be set aside except on one or more” of the three grounds set forth
in it. These grounds were: --

1. An arbitrator or umpire has misconducted himself or the proceeding.

2. An award has been made after the issue of on order by the court superseding the
arbitration or after arbitration proceedings have become invalid under S.35, &
3. An award has been improperly procured or is otherwise invalid.

Whereas S.16 (1) of the 1940 Act, empowers the court to remit the award to the arbitral
tribunal for reconsideration. But now this two sections i.e. Sec. 30 & 16 (1) of the 1940 act
has now been replaced by Sec. 34 of the Arbitration & Conciliation Act, 1996. This provision
reinforces the current trend in the Indian law to allow judicial scrutiny of the merits of arbitral

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awards only on an exceptional basis. As, it can be inferred from the various judicial
pronouncements of the courts.

INTERPRETATION OF SECTION 34

Sec.5 of the said act regulates the court intervention in the arbitral process. It provides that
notwithstanding anything contained in any other law for the time being in force in India, in
matters governed by Part I of the 1996 Act, the court will not intervene except where so
provided in this part. The wordings of the bill introduced in the parliament, had the intention
to curb the judicial interference in the arbitral proceedings. This act indented to reduce the
legal challenge to arbitral award (as can be inferred from S. 35 1 of the Act which talks about
the finality of the Arbitral Award) But Sec.34 of the act calls for the need of the judicial
intervention as, the objection filed under Sec.34 of Arbitration & Conciliation Act, 1996 has
to be first tested on the touchstone of the provisions of S.34 of the Act & only when the court
finds that the objections raised in the petition are covered by any of the grounds mentioned
therein, may the court consider the same & proceed to dispose them off on merits2 .Pursuant
to this policy S.34 also imposes certain restrictions on the right of the courts to set aside an
arbitral award. These grounds for challenge of an arbitral award are strictly limited. Indeed
the five grounds contained in S.34(2) on which the party making the application to set aside
the award is entitled to rely on, are concerned with largely procedural irregularities, either in
the arbitral proceedings or in the award itself. If a challenge is successful, the award generally
will be set aside, in whole or in part- although there is a possibility of „rescue' by remission to
the arbitral tribunal for reconsideration. However the objection that the award has become
null & void in view of subsequent agreement between the parties is not one of the grounds
available under S.35(2) to challenge the award3 .

a. Where a party making the application was under some incapacity.

b. The arbitration agreement is not valid under the law to which the parties are subjected or
failing such indication thereon, under the law for the time being in force.

1
Finality of arbitral awards -Subject to this Part an arbitral award shall be final and binding on the parties and
persons, claiming under them respectively.
2
UOI v. Hakam Chand ad Co., 2003 (Supp) Arb LR 537 ( Del )
3
Manasuya Devi v. M Manik Reddy , (2003) 8 SCC 565
4
Section 34 (2), Arbitration & Conciliation Act, 1996 5
AIR 2001 SC 1219.

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c. The party making the application was not given proper notice of the appointment of
arbitrators or of the Arbitral Tribunal or was otherwise unable to present his case.

d. Arbitral award deals with a dispute not contemplated by the parties or beyond the terms of
submission.

e. Composition of the Arbitral Tribunal was not in accordance with the agreement of the
parties.

f. Subject-matter of dispute is not capable of settlement by arbitration under the law for the
time being in force.

g. The arbitral award is in conflict with the public policy of the country4.

In Sanshin Chemical Industry v. Oriental Carbons & Chemical Ltd.,5 there was a
technical collaboration agreement between parties for referring any dispute or claim arising
out of, or relating to the agreements to be settled by arbitration of an arbitral tribunal and
another part of the agreement related to a decision as to venue of arbitration which in the
event of lack of agreement between the parties, was required to be determined by a Joint
Arbitration Committee of three members. There arose a dispute between the parties regarding
the decision of the Joint Arbitration Committee relating to agreement as regards venue of
arbitration and the question before the Supreme Court was whether an appeal against such
decision can be filed. Answering in the negative, the Apex Court held that, "decision on the
question of venue will not be either an award or an interim award so as to be appealable
under Section 34 of the Act". The Court further held that the conclusion of the Joint
Committee is a conclusion on the guidelines contained in clauses of agreement and, therefore,
it is not a judicial determination and as such the said conclusion would not amount to an
award. According to the Court, the ultimate arbitral award could be assailed on the grounds
indicated in sub-section (2) of Section 34 and an erroneous decision on the question of venue,
which ultimately affected the procedure that has been followed in the arbitral proceeding
could come within the sweep of Section 34 (2). The decision of the Joint Arbitration
Committee, not being an award or interim award, was, therefore, not appealable.

In order to set the machinery in motion for setting aside the arbitral award, it is necessary for
the aggrieved party to make an application under Section 34 stating the grounds of challenge.

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An application for setting aside the award has to be made by 'a party to arbitration agreement
and not a stranger'. But a legal representative' can apply for it because he is a person who is
bound by the award as per Section 35 of the Act which states that an award is final and
binding on the parties and the persons claiming under them.

Where the parties have acted upon the arbitral award during the pendency of the application
challenging its validity, it would amount to estoppel against attacking the award and,
therefore, the award would not be set aside.
AN ANALYSIS OF PUBLIC POLICY

S. 34(2)(b)(ii) provides that if the award is in conflict with public policy of India it can be set
aside. However the term “public policy” has not been defined anywhere in the act.
Simplistically speaking, the expression “public policy” connotes some matter which concerns
the public good and public interest. 4 An attempt to define public policy was made by
Winfield when he identified it as “a principle of judicial legislation or interpretation founded
on the current needs of the community”.5 However, current needs being a changing concept,
it is impossible to pigeon hole the same.6

It is this lack of definition and certainty of the concept which has led to judicial statements
against the extension of public policy. As Chitty rightly put it, the doctrine of public policy is
somewhat open-textured and flexible, and this flexibility has been the cause of judicial
censure of the doctrine.7By far, the most famous expression of disapproval against public
policy is its description as a „very unruly horse‟ which „you never know where it will carry
you‟.8 Other expressions of disdain include descriptions such as “a treacherous ground for
legal decision” and “a very unstable and dangerous foundation on which to build until made
safe by decision”.9 However, in the second half of the 20thcentury, the positive function of the
court in matters of public policy increasingly gained recognition. In fact, Lord Denning
stated, “With a good man in the saddle, the unruly horse can be kept in control. It can jump

4
See Sunil Gupta, „Challenge to Arbitral Awards on the ground of „public policy‟, 2003 (2) Arbitration Law
Review 5 (SC) at 2
5
Percy H. Winfield, „Public Policy in English Common Law‟, 42 Harvard Law Review 76 at 77
6
This is primarily because not only does the term vary with the social and cultural concepts of different nations
but it also varies from generation to generation in each nation. are two reasons for this. Firstly, it varies with the
socal and cultural concepts of different nations.
7
Chitty 836 (1999)
8
Richardson v. Mellish, (1824) 2 Bing. 229, per Burrough J. at p. 252 c.f. Anson‟s Law of Contract (J. Beatson
ed., Oxford: Oxford University Press, 1998, 27 th edn.) at 348.
9
Janson v. Drienfontein Consolidated Mines Ltd., [1902] A.C. 484, 500, perLord Davey.

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over obstacles. It can leap the fences put up by fictions and come down on the side of
justice.”10

There are two conflicting positions with respect to „public policy‟ which is especially
witnessed in English decisions, usually referred to as the „narrow view‟ and the „broad
view‟.
According to the „narrow view‟, courts cannot create new heads of public policy while the
„broad view‟ permits judicial law making. Indian courts over the years, till the infamous
ONGC verdict has been inclined towards a narrow interpretation of the term public policy.

ONGC v Saw Pipes Ltd Case11

The Supreme Court in the case of ONGC v Saw Pipes Ltd. Vs. (2003) 5 SCC 705 examined
the scope and ambit of jurisdiction of the Court under section 34 of the Act. It was held that if
the award is

(a) contrary to the substantive provision of law, or

(b) the provisions of the Act, or

(c) against the terms of the contract, it would be patently illegal which could be interfered
u/s 34. Supreme Court further held that phrase “public policy of India” use in Section 34
is required to be given a wider meaning and stated that the concept of public policy
connotes some matter which concerns public good and the public interest. The award
which is on face of it, patently in violation of statutory provisions cannot be said to be in
public interest.

In ONGC v. Saw Pipes Ltd. reiterating several principles of construction of contract and
referring to the contractual provisions which were the subject matter of the arbitral award, the
court ruled that “in the facts of the case, it can not be disputed that if contractual term, as it is,
is to be taken into consideration, the award is, on the face of it, erroneous and in violation of
the terms of the contract and thereby it violates Section 28(3) of the Act”.

Culling out the ratio from the decisions rendered under the 1940 Act, the court held: “It
is true that if the Arbitral Tribunal has committed mere error off act or law in reaching its

10
Enderby Town Football Club Ltd v. The Football Association Ltd. [1971] Ch 591, 606, per Lord Denning.
11
AIR 2003 SC 26299

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conclusion on the disputed question submitted to it for adjudication then the court would have
no jurisdiction to interfere with the award. But, this would depend upon reference made to the
arbitrator:

(a) if there is a general reference for deciding the contractual dispute between the
parties and if the award is based on erroneous legal proposition, the court could
interfere;

(b) it is also settled law that in a case of reasoned award, the court can set aside the
same if it is, on the face of it, erroneous on the proposition of law or its application;

(c) if a specific question of law is submitted to the arbitrator, erroneous decision in

point of law does not make the award bad, so as to permit its being set aside, unless the
court is satisfied that the arbitrator had proceeded illegally”.

The decision in ONGC case, though rendered by a bench of two Hon‟ble judges, has far
reaching consequences. Firstly, the decision construes the new Act, as, in its entirety
(Sections 2 to 43), laying down only rules of procedures (vide para 8 of the judgment). It
rules that “power and procedure are synonymous” and that “there is no distinction between
jurisdiction/power and the procedure”. Referring to Sections 24, 28 and 31 of the Act and
construing the words “arbitral procedure” in Section 34(2)(v) (and after observing that all the
provisions appearing in part I of the Act lay down arbitral procedure) it concludes that “the
jurisdiction or the power of the Arbitral Tribunal is prescribed under the Act and if the award
is de hors the said provisions, it would be, on the face of it, illegal”.

Construing the phrase “public policy of India” appearing in Section 34(2)(b)(ii), the court
held that in a case where the validity of the award is challenged on the ground of being
opposed to “public policy of India”, an wider meaning ought to be given to the said phrase so
that “patently illegal awards” could be set aside. The court distinguished the earlier decision
in Renu Sagar case12 on the ground that in the said case the phrase “public policy of India”
appearing in Section 7(1)(b)(ii) of the Foreign Awards (Recognition and Enforcement) Act,
1961 was construed which necessarily related to enforcement of foreign award after it
became final. Though the court accedes that “it is for the Parliament to provide for limited or
wider jurisdiction of the court in case where award is challenged”, it still holds that, in its

12
Ibid

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view, a wider meaning is required to be given to the phrase “public policy of India” so as to
“prevent frustration of legislation and justice”. Stating the reasons in support of its view the
court held that “giving limited jurisdiction to the court for having finality to the award and
resolving the dispute by speedier method would be much more frustrated by permitting
patently illegal award to operate. Patently illegal award is required to be set at naught,
otherwise it would promote injustice”.

Critical Appraisal

Two errors of great magnitude that have been committed in this case are:

1. While reviewing the merits of the ONGC case,13 the court failed to consider the
labour strike in entire European continent, something which was neither under the
control nor could be predicted by SAW Pipes. This particular aspect has been
completely overlooked by the court.

2. The decision of the two judges Bench in ONGC has bypassed the ruling of the
three judges Bench of Supreme Court in the Renusagar case. That shows both
judicial indiscipline and violation of the binding precedent of a larger Bench.
While the Bench in Renusagar case held that the term „public policy of India‟ was
to be interpreted in a narrow sense, the Division Bench went ahead unmindful of
the prior precedent and expanded the same to such an extent that arbitral awards
could now be reviewed on their merits. This is a huge step backwards in laws
relating to alternate dispute resolution in the era of globalisation

Accordingly in order to nullify the effect of above decision of the Supreme Court, it is
proposed that the existing Explanation in section 34 be renumbered as Explanation 1 and
after that Explanation as so renumbered the following Explanation shall be inserted.

“Explanation II For the purposes of this section “an award is in conflict with the public
policy of India” only in the following circumstances, namely:

When the award is contrary to the

(i) fundamental policy of India; or

13
ONGC v. SAW Pipes Ltd., AIR 2003 SC 26299

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 (ii) interests of India; or
(iii) justice or morality.’”

Limitation Period: Section 34(3)

Section 34 (3) provides that an application for setting aside an arbitral award must be made
within three months from the date on which the party making application has received the
arbitral award or within three months from the date on which the application of the party was
disposed of by the arbitral tribunal.

The proviso to sub-section (3) allows the party a further period of thirty days after the expiry
of three months if the court is satisfied that the party was prevented by a sufficient cause from
making application within the said period of three months. However, no application for
setting aside the award can be entertained by the court after the expiry of these additional 30
days period.

The Supreme Court in State of Goa v. M/s. Western Builders, 14 clarified by virtue of sub-
section (3) of Section 34 of the Arbitration Act 1996, the application for filing and setting
aside the award a period has been prescribed as three months and delay can be condoned to
the extent of 30 days. It is only to this extent that the applicability of Section 5 of Limitation
Act, 1963 will stand excluded, but there is no provision in the Act which excludes operation
of Section 14 of the Limitation Act. The Court further held that the statement of objects and
reasons also nowhere indicates that Section 14 of the Limitation Act shall be excluded. On
the contrary, as evident from the provision of Section 43 of the Arbitration and Conciliation
Act, 1996, the Limitation Act as a whole would be applicable to the Arbitration Act and it is
only by virtue of Section 29 (2) of the Limitation Act that its operation is excluded to the
extent of the area which is covered under the Arbitration Act, 1996. Thus laying down the
ratio of the case, the Supreme Court concluded that the Arbitration Act, 1996 does not
expressly exclude the applicability of Section 14 of the Limitation Act, 1963 and this
prohibitory provision has to be construed strictly.

WHICH COURT HAS JURISDICTION TO SET ASIDE AWARD

14
AIR 2006 SC 2525.

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The place of subject-matter of arbitration is generally the Court that is competent to entertain
application under Section 34 for setting aside the award. Thus where the work under the
agreement was done at Kanpur, the Delhi Court could not have jurisdiction just because the
Union of India, the concerning party was head quartered in Delhi or the arbitration had taken
place in Delhi and award was made at Delhi.43

Where the properties in dispute are located within the jurisdiction of two courts at different
places, either of the two courts will have jurisdiction to decide an application for setting aside
the arbitral award irrespective of the extent of property. But once one of these courts has
assumed jurisdiction and entertained the application under this section, that court alone shall
have jurisdiction to dispose of the case and no other court shall be competent to have
jurisdiction in the case.15

The question as to which Court has the jurisdiction to entertain application for setting aside
the award came up for consideration before the Supreme Court in Khaleel Ahmad Dakhani
v. Hatti Gold Mines Co. Ltd.16 In this case the State Government of Karnataka awarded a
contract to build school at Hatti in District Raichur. A dispute arose between the Government
and the building contractor and the award was passed in State capital Bangalore. The
Government filed application for setting aside of award in Bangalore Court. Pending such
application, the contractor sought enforcement of the award by District Court, Raichur. The
Raichur Court entertained the execution application holding the State
Capital Court had no jurisdiction to entertain application for setting aside the award. The
Supreme Court held that the order passed by the Raichur Court was not proper in view of
Section 20 CPC because it cannot be always said that only one Court has jurisdiction to
entertain such application.

Where the arbitration relates to an international commercial arbitration, the provision of Para
1 (a) Article V of the New York Convention or Article 3 of the Geneva Convention may be
applied. According to these provisions the Court of the country in which or under the law of
which the award was made, would have jurisdiction to set aside the award. However, in
International Standard Electric Corporation v. Bridas Sociedas Anomia 17 it was held that

15
AIR 1988 SC 1347.
16
AIR 2000 SC 1926.
17
Y.B. XVII (1992) U.S. 115.

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only the court of the country in which the award was made has the jurisdiction to vacate or
set aside the award.

An award rendered by a panel of arbitrators that was tainted with 'bias' or 'impartiality' may
be set aside under Article V (2) (b) of the New York Convention as violative of public
policy.18 It is for the party challenging the award to prove that under those circumstances 'a
reasonable person would conclude that the arbitrator was partial to one party to the
arbitration'.19

INSERTION OF SECTION 34A

Law Commission while suggesting amendment in Section 34 also recommended that in case
of domestic arbitration, new ground for challenges viz. mistake appearing on face of award
may be made available.

Accordingly it recommended for inserting a new Section 34A.

It is desirable to provide some recourse to a party aggrieved by a patent and serious illegality
in the award which has caused substantial injustice and irreparable harm to the applicant. It is
a delicate task to strike a balance between two equally important but conflicting
considerations, namely giving finality to the arbitral award and redressing substantial
injustice caused by some patent and serious illegality in the award. As no tribunal is
infallible, it is desirable to provide some recourse to a party who has suffered substantial
injustice due to patent and serious illegality committed by the arbitral tribunal. It is true that
whatever expression is used in the grounds of recourse to take care of such situation, the
possibility of abuse thereof by a disgruntled party cannot be ruled out. However, one cannot
lose sight of the ground realties. There is no denying the fact that the overall scenario in the
field of arbitration is not as ideal as it should be. As pointed by Lord Mustill, arbitration has
become a business, often involving very large sums, and bringing in its train substantial
monetary earnings for all concerned and there has been a concurrent decline in the standards
of at least some of those who take part in it. It is no good wringing hands about this, for it is a
fact to be faced, and part of facing is to recognise that some means must be found of
protecting this voluntary process from those who will not act as they have agreed or as is

18
York Hannover v. American Arbitration Association, Y. B. XX (1995) US 169. See also P. T. Rea Suransi v.
Evanston, YB XIX (1994) US 149.
19
Morelite Construction Corporation v. New York...Funds, 748 F 2d 79 (2d Cir. 1994).

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expected of them. Here lies the need for providing some ground of recourse in case of patent
and serious illegality causing substantial injustice.

Section 34A as suggested by the Law Commission with some changes:

“34A. Application for setting aside arbitral award on additional ground of patent and

serious illegality.

Recourse to a Court against an arbitral award made in an arbitration other than an Int
ernational commercial arbitration, can also be made by a party under subsection (1) of
section on the additional ground that there is a patent and serious illegality ,which has
caused or likely to cause substantial injustice to the applicant .

(2)Where the ground referred to in sub section (1) is invoked in an application

filed under sub section (1) of section 34, while considering such ground, the Court
must be satisfied that the illegality identified by the applicant is patent and serious
and has caused or is likely to cause substantial injustice to the applicant” Conclusion

The law of arbitration in India is very much at its crossroads. An eminent personality has
commented at the state of affairs of arbitration laws in India as “arbitration in India is not for
the faint-hearted”. 20 It is largely upto the Indian Judiciary to step in and contain the
interventionist role it has assumed for itself and have greater trust in the arbitral process. Mr.
Javed Gaya2122 has stated that the Supreme Court‟s judgment in SAW Pipes would encourage
further litigation by the aggrieved party to arbitration, and in doing so diminish the benefits of
arbitration as a mode of dispute resolution. The harsh reality is that courts are totally unequal
to the task of meeting the basic expectations of the litigating community. Mr.
Kachwaha57opines that these very courts cannot be leaned upon to salvage the perceived
inadequacies of the arbitral system through their greater intervention. Rather, the courts must
take the law forward based on trust and confidence in the arbitral system.

20
Gaya, Javed, „Judicial Ambush of Arbitration in India‟, L.Q.R.2004, 120 (OCT), 571-574
21
Ibid 57 Kachwaha, Sumeet, „The Indian Arbitration Law : Towards a New Jurisprudence‟, Int. A.L.R. 2007,
10(1),
22
-17

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Very recently, the Supreme Court in McDermott International Inc Vs. Burn Standard
Company Ltd.,23 accepted that the ONGC judgment was “subjected to considerable adverse
comments and went on to observe that only a larger Bench can consider its correctness or
otherwise”. 24 One wonders why it felt shy of referring the matter to a larger Bench.
Similarly, the court does not miss an opportunity to criticise the legislature, where it said, “It
must be stated the recent act (Arbitration and Conciliation Act, 1996) does not appear to be a
well drafted legislation”. In our view, the court has ignored that certainty of law is one of the
basic requirements of law and it is more so in international business transactions.

BIBLIOGRAPHY

(1) P Malhotra, „The Law and Practice of Arbitration and Conciliation‟, (New Delhi:
Lexis Nexis-Butterworths: 1sted., 2002.)

(2) P C Markanda, „Law relating to Arbitration and Conciliation‟,(Nagpur: Wadhwa

and Co.: 6th ed., 2006).

(3) R S Bachawat, „Law of Arbitration and Conciliation‟, (Nagpur: Wadhwa and Co.:
Vol. I, 4th ed., Justice M. Jagannadha Rao, „Arbitration in India: Section 34, ONGC
vs. SAW Pipes, Manifets illegality and similar approaches in UK and US‟ Halsbury‟s
Law Monthly, May 2009.

(4) Justice D. R. Dhanuka, „A critical analysis of the judgment ONGC vs. SAW Pipes
Limited‟, 2003 (2) Arbitration Law Review 51 (JS).

(5) V.K Gupta, „In Defence of ONGC Ltd. vs. SAW Pipes Ltd.‟, 2004 (1) Arbitration
Law Review 54 (JS) 2005).

Websites

1. http://www.manupatra.com/
2. http://scconline.com/
3. http://www.google.com/

23
McDermott International Inc v. Burn Standard Company Ltd., (2006) 11 SCC 181, at p.211
24
Bhatia International v. Bulk Trading SA, (2003) 5 SCC 105

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4. http://jurisonline.in/2010/03/is-judicial-intervention-in-arbitration-justified/

5. http://arbitration.indlaw.com/search/articles/

6. http://www.unilawonline.com/articles/RECOURSE%20_%20SECTION%2034%20O
F%20A&C %20ACT,%201996.htm

7. http://www.legalblog.in/2011/01/public-policy-under-arbitration.html

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