- The Hon’ble Supreme Court (SC), in the case of Mutha Construction v Strategic Brand Solutions (I) Pvt Ltd, has held that the Court has jurisdiction to remand back the matter to the Arbitrator for a fresh reconsideration if both the parties have consented to set aside the award and remit the matter for a fresh reasoned award.
- The parties were in arbitration before a Sole Arbitrator (Arbitrator) in relation to a dispute. Aggrieved by the award, the Petitioner preferred a Commercial Arbitration Petition under Section 34 of the Arbitration and Conciliation Act, 1996 (Act).
- In an order passed by the learned Single Judge, the award was set aside by consent of the parties and the matter was remanded back to the same Arbitrator for fresh consideration thereby disposing the petition under Section 34 of the Act (Order 1).
- Later on, an application seeking modification of Order 1 on the limited ground that consent has not been accorded for remanding the matter back to the same Arbitrator was dismissed (Order 2).
- Aggrieved by the said Orders, the Petitioner filed a review petition which was rejected on an observation being made that Order 1 was passed by consent. Being aggrieved by the aforesaid Orders and the rejection of the review petition, a petition to division Bench of the High Court (HC) was passed.
- In its order, the HC refused to restore the appeal specifically observing that Order 1 was a consent order and remarked that even if the appeal was restoredno useful purpose would be served since the Court was not inclined to allow the appeal on merits.
- Aggrieved, the applicant preferred an appeal with the SC by way of SLP.
- The Petitioner, relying on the ratio laid down in Kinnari Mullick and Anr. v Ghanshyam Das Damani, Dyna Technologies Pvt Ltd v Crompton Greaves Ltd, and IPay Clearing Services Private Limited v ICICI Bank Limited contended that the Appellate Court, while exercising its powers under Section 34 of the Act cannot set aside an award on the ground that no reasons have been assigned and cannot remand back the matter to the same Arbitrator.
- The SC remarked that the decisions relied upon by the Petitioner shall not be applicable in the instant case as the single judge passed a consent order wherein both the parties agreed to set aside the award and remand the matter back for a fresh reasoned award.
- Dismissing the appeal, the Court held that principle of law laid down in the cases relied upon by the Petitioner will be applicable where the application under Section 34 is decided on merits. However, in the instant case, since it was a consent order, it was not open for the Petitioner to contend that the matter must not be remanded back to the same sole arbitrator."
- The Court further held that even in a case where the award is set aside under Section 34 of the Act on whatever the grounds which may be available under Section 34 of the Act, the parties can still agree for a fresh arbitration by the same arbitrator.
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