SC Upholds Arbitration Act, Warns Courts Against Interfering with Awards

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{ "title": "SC Upholds Arbitration Act, Warns Courts Against Interfering with Awards", "article": "New Delhi: In a significant ruling, the Supreme Court has upheld the Arbitration and Conciliation Act, 1996, and cautioned courts against intervening excessively in arbitral awards. The top court observed that frequent challenges in courts would defeat the purpose of the Act, which aims to resolve commercial disputes through arbitration with minimal judicial intervention. The bench, comprising Justices P S Narasimha and Pankaj Mithal, made these remarks while setting aside a 2021 Madras High Court judgment that directed the deletion of a claim awarded by an arbitral tribunal to a firm. The SC held that if courts interfere at every stage, it would undermine the Act's purpose of providing a speedy and inexpensive resolution of disputes. The court emphasized that an arbitral award should be accepted if it's not patently illegal or beyond the scope of Section 34 of the Act, which deals with setting aside arbitral awards. The SC also noted that the appellate jurisdiction acquires little significance when an arbitral award has been upheld under Section 34. In this case, a firm filed an appeal challenging a high court order that deleted a claim awarded by an arbitral tribunal for idling charges of a dredger. The SC upheld the arbitral award, stating that the Act provides for a challenge on limited grounds, as contemplated by Section 34. The bench reiterated that the primary objective of the Act is to provide a speedy and inexpensive mode of resolution through arbitration, with minimal judicial intervention. "