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The Arbitration and Conciliation Act of1996 specifically the Section 34 of this act authorizes any person who is affected by an unjust arbitral award, with a right of filing a petition to a court of law to


The Arbitration and Conciliation Act of1996[1]  specifically the Section 34 of this act authorizes any person who is affected by an unjust arbitral award, with a right of filing a petition to a court of law to set aside that arbitral award. And that this power includes the power to amend an arbitral award is a point on which there were differing judicial opinions of the various High Courts of India, and the legal position is hardly clear in India’s arbitration regime. The Honorable Supreme Court of India, in its discretion in the NHAI v. M Hakeem[2], cleared the air around this decades-long debate and has held that the inclusion of the right to amend an arbitral award in SECTION 34 would be invalid and reaffirms the position that the state expects minimal judicial intervention in arbitral awards.


Various notices were published in accordance with the National Highway Act of 1956[3], and in connection to this, several orders were issued by the competent authority. The competent authority in this regard is the Special District Revenue Officer (SDRO). SDRO has the authority to determine the amount of land compensation acquired for the construction of highways. If either party is not satisfied with the compensation provided by SDRO, the issue will be resolved through arbitration. In this case, the competent authority, whilst making these orders, used the guideline value of the said lands instead of the value based upon the sale deeds of other identical lands. As a result, SDRO had released a low and unreasonable amount in the form of compensation. Upon applying with the arbitral tribunal to challenge this compensation, the arbitral tribunal determined that the compensation granted was just and therefore SDRO’s order was valid. For this reason, all other compensation claims were disposed of with a grant of the same amount of compensation.[4]


Before the District Court

The district court found that section 34 of the Arbitration Mediation Act empowered the court not only to dismiss the arbitral award, but to amend it. Therefore, the court ruled that the remuneration awarded by the ruling was low and therefore raised the remuneration to   Rs. 645 per square meter.[5]

Before the Madras High Court

The High Court upheld the district court’s order in this regard.[6]

Before the Supreme Court

The National Highway Authority of India appealed to the Honorable Supreme Court of India for an order to overturn the orders of the District Court and the High Court. [7]


  1. Can the court amend the arbitral award under SECTION 34 of the Arbitration Act?
  2. Has the National Highway Authority of India taken any disadvantageous action by giving differential compensation to people in similar situations? [8]



The appellant’s counsels contended that the power of the Appellate court under the Land Acquisition Act[9], and the power under Section 34 of the Arbitration Law are different as it is limited to either “overturning the ruling” or “refusing the ruling”. In addition, they argued that the NHA’s goal was to provide a rapid process in which an objection to an arbitral award would proceed only under Section 34 of the Arbitration Act. This challenge is not based upon the merits of the award, as clarified by some of the decisions made by the Supreme Court. The appellants referred to the Arbitration Act of 1940[10], arguing that the Section 15 explicitly empowers the arbitral tribunal to make / amend arbitral awards, but the Arbitration and conciliation Act of 1996 is based on the UNCITRAL Model Law on International Commercial Arbitration, 1985,[11] the law explicitly limits scope of alternative redressal and consequent remedies that can only be overruled or revoked in certain circumstances.. [12]


On the contrary, the respondents argued that if Section 34 was interpreted in the manner proposed by the appellant then the only thing a district judge would be able do with an arbitral award within the jurisdiction of Section 34 was to set it aside and further they insisted that there was no remedy for any unjust awards being given as these cases would lead to new arbitration proceedings in front of the same bureaucracy or another officer appointed by the same central government. In addition to this, The High Court at Madras, in accordance with the proceedings of Gayatri Balaswamy v ISG Novasoft Technologies Ltd[13] distinguished between consensual arbitration and central government-appointed arbitrators who only approve compensation granted by other government officials. Also, since such new arbitration will take place in front of similar bureaucrats appointed by the central government, it would be of no value to set aside the current ruling and initiate a new arbitration as proposed by the opposite counsel.[14]


  • National Highway Act, 1956.

Para 2 of the statements of object and reasons, Section 3(a), Section 3A and Section 3G.

  • Arbitration and Conciliation Act, 1996.

Section 34.


The Apex Court, with regards to this case, decided that the Section 34 of the Arbitration Act provides only restricted justifications on which an arbitral award may be overruled under sub Sections (2) and (3) of Section 34. The arbitral tribunal pointed out that this Section was based on the UNCITRAL model law[15] and that the policy of the legislature regarding this was to ensure minimum court intervention in the arbitration procedure. The court also recorded several rulings such as SsangYong Engg & Construction Co. v. NHAI[16] and Renusagar Co. Ltd. v. General Electric Co.considers [17]that an objection under Section 34 will not be on the merits of the dispute. Regarding this, the Court also referred to the previous case of McDermott International Inc. v. Burn Standard Co.[18] which dictates that the 1996 Act only provides for the directorial role of the courts, only to analyse arbitral awards. Court intervention is acceptable in certain circumstances, for an example in cases of violations of principles of natural justice.Courts are not to rectify the mistakes of arbitrators.. The court also referred to the decision of the Delhi High Court in Cybernetics Network Pvt. Ltd v Bisquare Technologies Pvt. Ltd[19], in which the High court held that the jurisdiction of the courts under Section 34 was’nt the same as that of the appellate court and, therefore, it is incapable of dealing with the cases already settled by the Arbitration Tribunal. If done so, the courts would act against the legal regime of Section 34. Whilst referring to the case of Gayathri Balaswamy, which was cited by the respondents, the court ruled that the case it relied on in its judgment was such that the change in the ruling was in the application of power under SECTION 142 of the Constitution[20]. The court concluded that it was wrong to apply this judicial trend into the words of Section 34 of the Arbitration, which gives judges the power to revise, change and modify awards. This would contradict the large number of rulings, as well as the scheme of the arbitration law, which sought to limit court interference. Therefore, the arbitrator considered that it was erroneous to read this judicial bias in the interpretation of Section 34 of the arbitration as a power to amend, amend and alter awards. This would be inconsistent with many awards and arbitration regimes, which are intended to limit judicial intervention.[21]

In support of these aforementioned observations, the court, in this case[22], stated that in interpreting a statutory provision, a judge must put himself in the shoes of the legislature and then ask whether the legislature intended the outcome or not.  The legislature has made it very clear that no authority to change an arbitral award should exist in the Arbitration Act of 1996, Section 34. Only Parliament can change the above laws based on the findings of the courts. [23]


Three main interpretations can be construed from this case. First, the Section 34 the Arbitration  and conciliation Act of 1996 prevents the Court to rule on merit and change the decision of the arbitrator and secondly, there can be no difference in conduct towards people and in the payment of money to compensate people in a similar situation and finally, the Supreme Court, in this case, ended a years-long confusion regarding the Court’s authority under aforementioned Act’ Section 34 and explained the status of the law in this matter and now the burden is shifted towards the legislature to amend the present law to keep up with the worldwide practices and to ensure justice to the parties as well.

Author(s) Name: Arnab Paul (JSS Law College, Mysore)


[1] Arbitration and Conciliation Act, 1996, s 34

[2] Project Director, NHAI v M Hakeem (2021) SLP (Civil) NO.13020/2020

[3] National Highway Act, 1956, s 3A

[4] Akash Krishnan, ‘NHAI v. M Hakim: putting a quietus to issue of modification of arbitral awards’ (Ipleaders, 1 November 2021) <> accessed  21 July 2022

[5] Ibid

[6] Ibid

[7] Ibid

[8] Ibid

[9] Right To Fair Compensation And Transparency In Land Acquisition, Rehabilitation And Resettlement Act, 2013

[10] Arbitration and Conciliation Act, 1940, s 15

[11] UNCITRAL Model Law on International Commercial Arbitration, 1985

[12] Subroto Banerjee, ‘India: Project Director, NHAI v M Hakeem: Analysis On Supreme Court’s Power To Modify Arbitral Award’ (Mondaq, 16 February 2022) <> accessed  21 July 2022

[13] Gayatri Balaswamy v ISG Novasoft Technologies Ltd., (2014) Original Petition No. 463/2012

[14] Subroto Banerjee (n 12)

[15]UNCITRAL Model Law on International Commercial Arbitration, 1985

[16]Ssang Yong Engg & Construction Co. v NHAI (2019) SLP (Civil) No. 19033/2019

[17] Renusagar Co. Ltd. v General Electric Co., (1994), AIR 860

[18] McDermott International Inc. v Burn Standard Co., (2006) Appeal (Civil) No. 4492/1998

[19] Cybernetics Network Pvt. Ltd v Bisquare Technologies Pvt. Ltd., (2012) O.M.P. No. 267/2005

[20] Constitution of India, 1950,s 142

[21] Subroto Banerjee (n 12)

[22] Project Director, NHAI (n 2)

[23] Subroto Banerjee (n 12)