INTRODUCTION
Post completion of the arguments in an arbitration matter, when the arbitral award is passed by the arbitral tribunal, the substantive issues might have been held in your favour, but the actual quantitative aspects might have been miscalculated or incongruent to the substantial portions of the award. In such situations it might seem that challenging the award might be the only option. However, Section 33 of the Arbitration and Conciliation Act ("Arbitration Act") might just be the provision you need to rectify apparent errors in the award. Section 33 provides for correction and interpretation of arbitral award. This section is like Section 152 and 153 of the Code of Civil Procedure, 1908 which allows the courts (either of its own motion or on application of any of the parties) to amend any judgment, decree or order to rectify any clerical or arithmetical mistakes arising therein from any accidental slip or omission by the Court while passing such judgment, decree or an order.
Prima facie, it appears that Section 33 of the Arbitration Act intends to provide an opportunity to the parties and the arbitral tribunal to correct any such errors1 , so that no party is put to disadvantage merely because of such technical or clerical errors in the award. However, the parties may cunningly seek a review or recall or reargue its claim under the garb of seeking clarification or correction under this section which is not only outside the purview of Section 33 of the Arbitration Act but if allowed, may render the entire arbitration process futile.
ANALYSIS OF SECTION 33 OF THE ARBITRATION ACT
This part of the piece will analyse Section 33 of the Arbitration Act by discussing the scope and the extent of powers and remedy available to various stakeholders such as parties to arbitration agreement and the arbitral tribunal under Section 33 of the Arbitration Act.
Scope of powers
An application under Section 33 of the Act imposes certain restriction on the parties. The said provision cannot be utilised to review the merits in an arbitral award passed2. A party seeking a review against the merits of an arbitral award, cannot be allowed to take siege of Section 33 of the Act. An Arbitral Tribunal or the Arbitrator, as the case may be, can within 30 days from the receipt of the arbitral award, correct any computation, clerical or typographical errors or any other errors of similar nature, but the section does not enable any judicial review of the judgment. The Arbitral Tribunal has specific and limited jurisdiction which cannot traverse beyond the scope of Section 33 of the 1996 Act3.
The Delhi High Court in Fullerton India Credit Company Ltd. vs Jai Prakash Sharma4 while dealing with a petition under Section 37 of the Act against the order passed by the Ld. Single Judge. The Ld. Single Judge had granted liberty to the petitioner to move an application under Order IX Rule 13 of the Code of Civil Procedure, 1908 for setting aside the ex-parte award.
The Division Bench held that once an award has been made by an Arbitrator, the only power which the Arbitrator can exercise in respect of the award has been specified under Section 33 of the said Act. The Division Bench observed that Section 33 of the Act does not contemplate the power for setting aside an exparte award and accordingly set aside the order passed by the Ld. Single judge.
Clerical Error
Section 33(1)(a) of the Arbitration Act allows parties to the arbitration proceedings to request the arbitral tribunal to correct inter alia any computation, technical or typographical errors in arbitral award within 30 days from the receipt of such arbitral award. However, a notice in this regard must necessarily be sent to the other party while making such a request for correction.
The scope of the term 'clerical error' was explained by the High Court of Andhra Pradesh in Bangaru Reddy vs. The State,5 and the High Court of Kerala in Instrumentation Ltd. vs. V.E. Kuttapan6, as an error that can be explained only by considering it as a slip or mistake on the part of the arbitral tribunal. It is a mistake or error relating to a peripheral matter and not relating to the merits of the contents of a document or an error in regard to substance of the matter.
Example - The Claimant had sought damages under a particular claim for Rs 20,00,000. However, the arbitrator while allowing the claim completely in favour of the claimant awarded Rs 2,00,000 instead of 20,00,000. The said error would be a permissible ground for filing an application under Section 33(1)(a) of the Act.
Interpretation
On the other hand, Section 33(1)(b) of the Arbitration Act allows parties to the arbitration proceedings to seek interpretation of a specific point or part of the arbitral award from the arbitral tribunal.
Akin to Section 33(1)(a) of the Arbitration Act, the notice must necessarily be sent to the other party and their consent be taken while seeking interpretation under Section 33 (1)(b) of the Arbitration Act. Any application for interpretation without obtaining consent of the other party, the arbitral tribunal will be dehors the power to entertain such an application for interpretation7. Further, it is important to note here that under the garb of seeking an interpretation of a specific point of part of the award, a party cannot seek to reargue its claim which has already been disallowed by the arbitrator. In other words, the party under Section 33 of the Arbitration Act cannot seek review or recall of the award made by the arbitral tribunal8.
Example - The Claimant invoked Section 33 of the Arbitration Act to seek interpretation in respect of the award of the learned Arbitrator, wherein the latter denied interest to the Claimant. However, the award was amply clear and left no room for interpretation. Accordingly, there is no scope of seeking any interpretation in respect of this part of the award from the learned Arbitrator as there was no ambiguity about it.
Under Section 33 (4) of the Arbitration Act, parties to the arbitration proceedings are allowed to request the arbitral tribunal to make an additional award vis-à-vis claims presented during the arbitral proceedings but omitted from the arbitral award provided it fulfils the notice and consent requirement similar to prescribed under Section 33 (1) (b) of the Arbitration Act. However, the said power can only be exercised for the claims which have been presented before the tribunal during the arbitral proceedings and cannot be applicable to claims which may be raised by a party for the first time in an application under Section 33 (4) of the Arbitration Act.
Example - Considering a situation wherein an arbitral award is passed, and the arbitrator fails to render a finding with respect to a specific issue framed by the tribunal, the parties would be at liberty to file an application under Section 33. The said error would be amenable under Section 33(4) of the Arbitration Act.
The Supreme Court of India ("SC") in McDermott International Inc. vs. Burn Standard Co Ltd9, was considering a challenge to an additional award made by the Respondent under Section 34 of the Arbitration Act. In this case, the SC held that Section 33 (4) of the Arbitration Act empowers the arbitral tribunal to make an additional arbitral award in respect of claims already presented to the tribunal in the arbitral proceedings but omitted by the arbitral tribunal subject to conditions inter alia there is no contrary agreement between the parties to the reference, such request is made within 30(thirty) days from the receipt of the arbitral award, the arbitral tribunal considers the request so made to be justified, and additional arbitral award is made within 60 (sixty) days from the receipt of such request by the arbitral tribunal.
Similarly, the High Court of Delhi in Union of India vs. Nav Bharat Nirman Co.[10], held that if an arbitrator inadvertently skipped to pass the arbitral award in respect of any claim(s) presented before it, it is empowered to make an additional award on such claim(s) under Section 33 (4) of the Arbitration Act.
SUO MOTU CORRECTION OF THE AWARD
It is also interesting to note here that by virtue of Section 33 (3) of the Arbitration Act, the arbitral tribunal is entitled to correct any such error as mentioned under Section 33(1)(a) of the Arbitration Act on its own initiative within 30 (thirty) days from the date of making the arbitral award, however, no such power is extended to the arbitral tribunal in case it omits any claim(s) from the arbitral award. Despite the arbitral tribunal becoming aware (within thirty days) about the omission of any claim(s) from the arbitral award, it is devoid of any power to act except to wait for an application under Section 33(4) of the Arbitration Act. Moreover, this anomaly is more alarming in an event where the parties fail to make such an application within the limitation period of 30 (thirty) days from receipt of the arbitral award as prescribed under Section 33 (4) of the Arbitration Act because there is no power given to the arbitral tribunal under the Arbitration Act to condone such delay.
Ironically, under Section 33(6) of the Arbitration Act, the arbitral tribunal is empowered to grant extension to itself if it deems necessary to make a correction, give an interpretation or make an additional award under Section 33(2) and Section 33(5) of the Arbitration Act respectively. The scope of this power will be dealt in more detail in the next section of this piece.
INTRICACIES UNDER SECTION 33 OF THE ARBITRATION ACT
In this part, we will discuss various loopholes and ambiguities surrounding Section 33 of the Arbitration Act such as lack of power of the arbitral tribunal to condone delay, wide discretion and accountability of the arbitral tribunal.
NO POWER WITH THE ARBITRAL TRIBUNAL TO CONDONE THE DELAY:
As discussed in the previous section, the arbitral tribunal does not have any power to condone the delay for filing an application under Section 33 (1) unless a period has been agreed between the parties11. The Act is silent on whether the delay is condonable for applications filed under Section 33 (4) of the Arbitration Act. Consequently, if the parties to the arbitration proceedings fail to adhere to the limitation period of 30 (thirty) days as prescribed under the above provisions, the said arbitral award will assume finality and the same could be enforced as a decree by virtue of Section 36 (1) of the Arbitration Act. Thereafter, the court cannot assume jurisdiction to interpret the award or correct the mistake or error after expiry of the period of limitation12.
This means that even in the case of a genuine delay in filing application under Section 33 (1) and Section 33 (4) of the Arbitration Act due to unforeseen circumstances, the aggrieved party will neither be able to seek correction or interpretation of the arbitral award nor will it be able to make a request for the arbitral award. This not only put the parties to disadvantage but also defeats the entire purpose behind the private dispute resolution mechanism. The only remedy which may be available would be to challenge the said award under Section 34 of the Arbitration Act.
WIDE AND UNFETTERED DISCRETION AVAILABLE TO THE ARBITRAL TRIBUNAL:
As per Section 33 (2) and Section 33 (5) of the Arbitration Act, the arbitral tribunal is bound to act only when it is satisfied to the extent that the request made under Section 33(1) and Section 33(4) of the Arbitration Act by the parties is justified. However, neither Section 33 nor any other provisions of the Arbitration Act enumerate a mechanism or parameter to determine the justifiability of such requests and the same is left open to the arbitral tribunal to decide.
Moreover, the Arbitration Act neither shoulders any responsibility on the arbitral tribunal to give reasons for rejecting such requests under Section 33(2) and Section 33(5) of the Arbitration Act nor provides any remedy to the aggrieved party in case such a request is not held to be justified by the tribunal and therefore, in authors' opinion the only remedy available to the aggrieved party is to move an application under Section 34 of the Arbitration Act and challenge the said award.
NO ACCOUNTABILITY OF THE ARBITRAL TRIBUNAL:
Section 33(2) and Section 33(5) of the Arbitration Act fixes the timeline within which the arbitral tribunal must make the correction or give interpretation or make the additional arbitral award.
Accordingly, the requests under Section 33(2) and Section 33(5) of the Arbitration Act must be disposed of by the tribunal within 30 and 60 days respectively.
However, the Arbitration Act fails to fix any liability on the arbitral tribunal in case the latter is unable to meet the deadline prescribed under the above provisions. It also fails to address the sanctity of such arbitral award i.e. whether such an award would still hold good in law and enforceable as per Section 36 (1) of the Arbitration Act or the same would be on hold until the requests under Section 33 (2) and Section 33 (5) of the Arbitration Act are disposed of.
Albeit Section 33 (6) of the Arbitration Act empowers the arbitral tribunal to extend the timelines for deciding the requests under Section 33 (2) and Section 33 (5) of the Arbitration Act, there exists ambiguity vis-à-vis the quantum of time which can be extended and the scope of the term 'necessary' under Section 33 (6) of the Arbitration Act.
REMAND OF MATTER TO THE ARBITRAL TRIBUNAL BY THE COURT UNDER SECTION 34(4)
This part will discuss the concept of remand of the matter to the such grounds and keep the arbitral tribunal by the Court under Section 34 (4) in order to give former an opportunity to eliminate grounds for setting aside the arbitral award available under Section 34 (2) of the Arbitration Act.
Let's take an example, 'A' makes an application under Section 33 (4) requesting the arbitral tribunal to make an additional award, however, the said request is rejected by the arbitral tribunal without furnishing any reasons for the same. Now, what is the remedy available to 'A'?
While 'A' can certainly file an application for setting aside of the arbitral award under Section 34 (1) and succeed if A is able to establish any of the grounds available under Section 34 (2), it also has an alternate remedy in the form of Section 34(4) under which an application can be filed by 'A' before the court seeking to eliminate the grounds for setting aside the arbitral award.
Accordingly, if the court deems such a request to be appropriate, it can remand back the matter to the arbitral tribunal to eliminate award in abeyance till the matter is decided by the tribunal. However, the said power of the court should not be mistaken to assume that remitting the matter back to the arbitral tribunal by the court is for the purpose of reconsideration on the award or to pass a fresh decision rather it is solely to eliminate, if possible, any ground which might lead to setting aside of the award13. It is also important to note here that the court cannot suo motu exercise its power under this provision and can only act upon the request of an aggrieved party. Further, the limited remedy available to the parties under Section 34 (4) is required to be invoked before the arbitral award is set aside by the court as the latter become functus officio on disposal of the main proceedings under Section 3414.
Whether the decision of the arbitral tribunal under Section 33 (2) and Section 33 (5) of the Arbitration Act is a curable defect in terms of Section 34(4) of the Arbitration Act?
This part will briefly discuss and analyse various judicial pronouncements in order to address the above concern.
The High Court of Bombay ("BHC") in Geojit Financial Services Ltd. v. Kritika Nagpal ("Geojit Financial") 15, observed that in an event where the arbitral tribunal has overlooked a particular claim on which the parties led evidence and addressed arguments and if a request to address such grievance is made by the aggrieved party, the court can exercise its power and remand back the matter to the arbitral tribunal under Section 34 (4).
In Dyna Technologies Pvt. Ltd. v. Crompton Greaves Ltd. 16, the SC determined that a lack of reasoning or a gap in reasoning is a curable defect under Section 34 (4) so as to make the award enforceable, after giving an opportunity to the Tribunal to undo the curable defects. However, the SC clarified that only in the case of complete perversity in the reasoning of the arbitral tribunal, a challenge can be made under the provisions of Section 34.
Accordingly, if the arbitral tribunal refuses to entertain the request of the aggrieved party for correction or giving an interpretation under Section 33 (2), the said decision can be challenged and a request under Section 34 (4) can be made for eliminating such a ground for challenge. Request under Section 34 (4) can also be made if the arbitral tribunal while rejecting the request under Section 33 (2) fails to provide any reason whatsoever.
Similarly, in light of the BHC's decision in Geojit Financial, a request can be made by the aggrieved party to the court under Section 34 (4) if the arbitral tribunal refuses to make an additional award vis-à-vis claims presented in the arbitral proceedings but omitted from the arbitral awards.
It is also important to note here that an application under Section 34 (4) must be made within the time limit prescribed under Section 34 (3) i.e. within 30 (thirty) days from the date on which that request for correction, interpretation and additional award had been disposed of by the arbitral tribunal.
CONCLUSION
It is clear from the above discussion that there are two aspects to Section 33. Firstly, that it allows the parties to seek and empowers the arbitral tribunal to make a correction or give an interpretation or make an additional award so that the award is not rendered futile in terms of defects discussed above. Secondly, there exist lacunae under Section 33 such as lack of power to the arbitral tribunal to condone delay, wide discretion available to the arbitral tribunal and lack of accountability in case the tribunal fails to adhere to the timelines prescribed under Section 33 and the same must be addressed in order to ensure that Section 33 does more good than harm.
Further, an inspiration may also be drawn from some of the institutional arbitration rules such as Article 34 of the International Chamber of Commerce ("ICC") Arbitration Rules, 2021 and Rule 32 of the Singapore International Arbitration Centre ("SIAC") Arbitration Rules, 2016 wherein the draft award is submitted to the International Court of Arbitration of ICC and Registrar of the Court of Arbitration of SIAC respectively for scrutiny before final passing of the award.
This practice helps in ensuring that the award is of best possible quality and defect free.
The party aggrieved by the decision of the arbitral tribunal under Section 33 (2) and Section 33 (5), may seek remedy under Section 34 (4) as discussed above, however, the latter provision does not place any restriction upon the arbitral tribunal as to what should be done by the arbitral tribunal if the matter is remitted under Section 34(4). The arbitral tribunal may even refuse to do anything and still get away with it as Section 34 (4) is silent on what action must be taken by the arbitral tribunal if the matter is remitted under Section 34 (4). Therefore, this issue must also be addressed either by way of a legislative amendment or through a judicial pronouncement so that some liability is fixed for the arbitral tribunal under this provision.
Footnotes
1 Section 33(3) of the Arbitration & Conciliation Act, 1996
2 State of Arunachal Pradesh vs. M/s Damani Constructions, (2007) 10 SCC 742
3 Chandi Construction v. Executive Engineer 2013 (4) Arb LR 69
4 Fullerton India Credit Company Ltd. vs Jai Prakash Sharma FAO (OS) 542/2015 High Court of Delhi Decided on 19 November 2015 available at http://164.100.69.66/jupload/dhc/S AS/judgement/23-11- 2015/SAS19112015FAOOS5422015.p df
5 Bangaru Reddy vs. The State, AIR 1959 AP 95
6 Instrumentation Ltd. vs. V.E. Kuttapan, (1992) 1 KLJ 24
7 State of Arunachal Pradesh vs. M/s Damani Constructions, (2007) 10 SCC 742
8 CMI Ltd. vs. BSNL, 2011 (1) RAJ 480 (Del)
9 Mcdermott International Inc. v. Burn Standard Co Ltd., (2011) 5 SCC 758
10 Union of India v. Nav Bharat Nirman Co., 2003 (3) Arb LR 309
11 Tantia Construction v. Ircon International, OMP (Comm.) 593/2020, High Court of Delhi, Judgment dated 13 April 2021 available at http://164.100.69.66/jupload/dhc/C HS/judgement/16-04- 2021/CHS13042021OMPCOMM593 2020_214113.pdf
12 Global Co. v. National Fertilizers Ltd, 1999 (49) DRJ 660
13 Radha Chemicals v. Union of India (Order dated 10th October 2018 passed by the Supreme Court in Civil Appeal No. 10386 of 2018) https://main.sci.gov.in/supremeco urt/2017/41663/41663_2017_Order_1 0-Oct-2018.pdf
14 Kinnari Mullick & Ors. v. Ghanshyam Das Damani (2018) 11 SCC 328
15 Geojit Financial Services Ltd. v. Kritika Nagpal (Judgment dated 25th June 2013 passed by the BHC in Appeal No. 35 of 2013 in Arbitration Petition No. 47 of 2009)
16 Dyna Technologies Pvt. Ltd. v. Crompton Greaves Ltd., 2019 SCC OnLine SC 1656
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
