Award Can Be Set Aside U/S 34 Of Arbitration Act If Arbitrator Travels Beyond Arbitration Agreement: Madhya Pradesh HC
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Award Can Be Set Aside U/S 34 Of Arbitration Act If Arbitrator Travels Beyond Arbitration Agreement: Madhya Pradesh HC

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The Madhya Pradesh High Court bench of Justice Subodh Abhyankar affirmed that if arbitrator travels beyond the terms of the arbitration agreement while passing an award, such an award is liable to be set aside under section 34 of the Arbitration Act. Brief Facts This Arbitration Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 has been filed by the appellant-United India Insurance Co. Ltd., against the order dated 14.11.2017, passed by the District Judge, Ratlam in Misc.Civil Case No.22/2007 whereby, the Award passed by the Arbitrator dated 13.9.2004, has been affirmed and the application filed by the appellant u/s.34 of the Act of 1996, has been rejected. Based on the above, the court observed that in the present case, it is an admitted fact that the Insurance Company had already denied the claim, and thus, it was not a case where there was any dispute existed between the parties regarding the quantum of the compensation to be paid by the appellant-Insurance Company to the Ratlam Syenthetic rope manufacturing company, hence, the matter was not required to be referred to the Arbitration. The court concluded that the appellant has clearly made out a case for interference and the Award and the impugned judgment passed by the learned Judge of the district court under Section 34 of the Act of 1966, clearly falls within the category of sub-clause & of Clause of Section 34 of the Act, which provides for the dispute not contemplated by the Arbitration, and secondly, on the ground of composition of the Arbitral Tribunal which was not in accordance with the agreement of the parties.

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