
Reduction Of Interest Is Nothing But Modification Of Original Arbitration Award: Allahabad High Court Quashes Section 34 Order
Live LawThe Allahabad High Court has held that the District Judge exercising jurisdiction under Section 34 of the Arbitration and Conciliation Act, 1996 does not have the power to modify an award. “Reduction of interest is nothing but a modification of the original arbitration award, and accordingly, the same is illegal and against the principles established by the Supreme Court,” held Justice Shekhar B. Saraf relying on the decision of Supreme Court in on Larsen Air Conditioning and Refrigeration Company Vs. Union of India and others. Quashing the order of the District Judge reducing the rate of interest awarded by the Arbitrator, the Court held “It is trite law, settled by a catena of Supreme Court judgements that the Court does not have the power under Section 34 of Arbitration and Conciliation Act, 1996 to modify an award. The Court placed reliance on Larsen Air Conditioning and Refrigeration Company Vs. Union of India and others wherein the Supreme Court set aside the order of the High Court modifying the rate of interest awarded by the Arbitrator on grounds that the Arbitration Act, 1940 specifically provided for modification of award.
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