Supreme Court, while dealing with commercial cases should be very hesitant to touch the consistent view taken in the earlier judgments, even if the earlier view is not the best view, in the opinion of the Bench. More specifically, in countries like India where lakhs of cases are pending in different courts, parties will get drastically affected by one Judgment of the Supreme Court of India that destabilizes the consistent view. When a consistent view is formed after considering hundreds of judgments and followed in many judgments, that too when it is achieving the objective of the legislation, Supreme Court should not take another view since in the opinion of that bench the new view is the correct or better view. Court should not step into the shoes of the Parliament and see the actual intent of the parliament, as if a new legislation is enacted, in a situation where hundreds of judges have taken a consistent view for about 20 year

The Supreme Court of India in a recent Judgment1 held that the Courts while exercising its jurisdiction under Section.34 of the Arbitration and Conciliation Act,1996 (Hereinafter “the Act”) can only set aside or uphold the award and it cannot make changes to the award following the Hakeem Judgment2 . This is a shock and surprise to the whole arbitration community because the above view of the court not only derailed the existing consistent view, it also has indirectly overruled hundreds of judgments and give rise to thousands of appeals on this technical point. This judgment is putting thousands of award holders in deep distress because parts of their awards may be set aside, and they may have to go and initiate the arbitration process again to settle that point. The award holders have to undergo another arbitration process which may prolong for another 5 to 6 years to reach its logical conclusion. By this judgment two major problems arose one is inconsistency in dealing with commercial law and the other is defeating the objective of the arbitration which is speedy justice.

In the Hakeem case, the Supreme Court was dealing with a set of cases those arose out of the land acquisition cases under NHAI Act in which the arbitrator is a government officer, unilateral appointment of the Government/ NHAI. In the said case the

Arbitrator passed many awards giving less compensation to the landowners violating all settled principles of law. But the landowners had only the option of resorting to the restricted appeal under Section.34 of the Act. The High Court decided that in such land acquisition cases, Section 34 court has powers to modify the award and enhance the compensation. The Supreme Court of India, even though held that Section.34 does not allow courts to amend or correct the award and the only action that can be taken is to set aside the award under the grounds provided in S.34 of the Act

A Legislation does not stand as it is forever. The provision of the legislation gets different meanings over a period of time due to various courts interpreting and applying the same. Hence a provision after a few years of existence it cannot be understood as it was understood by the Parliament at the time of enacting it. The provision has to be understood as interpreted and understood by the Courts while dealing with that provision. Hence, Section 34 when enacted was different and after 25 years of application by courts is different. More over Comparing Act 1940 and Act 1996 and giving a finding that the legislature consciously dropped the power to amend the award in the 1996 Act is also a wrong conclusion. 1996 Act is just a copy of UNCITRAL Model law

In the recent case, the Supreme Court dealt with a situation where the High Court reduced the interest rate from 18% to 9% and the Supreme Court said such an alteration is not permissible in law and if Section 34 Court is of the opinion that an award or part of award is to be set aside, it should indicate the same to the parties. After that, on the application of a party, the matter can be referred back to the arbitrator indicating the difficulty in upholding the award so that the arbitrator can correct the same and then Court can uphold the award. This kind of a process is more complicated, unpredictable and can result in more complication. Let us assume that the S.34 Court found an interest rate as excessive and indicates to the parties and only party makes an application for sending back to arbitrator and arbitrator corrects the award and send back to S.34 Court. The other party challenged the order of the S.34 Court and S.37 Court is of the opinion that the interest granted is very low for certain reasons and again indicates to the parties and again on the application of a party matter goes to arbitrator and the arbitrator refuses to change the award and hence S.37 Court sets it aside. The same things may happen in the Supreme Court level also.

Hence, the author is of the opinion that the above said Judgment should be reviewed by the Supreme Court and S.34 powers include not only setting aside of the award but also to make alterations to the award to ensure justice in its capacity as a court exercising supervisory jurisdiction and to achieve the objective of the Act.