Demystifying arbitral tribunal’s power to make changes to the arbitral award

An arbitral tribunal is a creation of a contract between parties. The tribunal is brought to life when the parties decide to refer their inter-se disputes to the tribunal and once the final award is passed, the tribunal’s mandate comes to an end. However, under the Arbitration and Conciliation Act, 1996 (Act), termination of the mandate of an arbitral tribunal on passing the final award can be extended under Section 33 of the Act under limited circumstances.  

In this article, we discuss the powers of an arbitral tribunal regarding correction and interpretation of arbitral awards in light of the precedents laid down by Indian courts, and its interplay with the Code of Civil Procedure, 1908 (CPC). 

Scope of “correction of an award” under Section 33 

The provision extends the mandate of the arbitral tribunal beyond the making of the arbitral award and allows the arbitral tribunal to modify the arbitral award or pass an additional award. However, the scope is limited to: (i) seeking correction of computation, clerical, typographical errors, or errors of a similar nature; (ii) interpretation of a specific point or part of an arbitral award; and (iii) seeking an additional award as to claims presented but omitted from the arbitral award. As per the scheme of the provision, a party may, within 30 days from the receipt of the arbitral award, request the arbitral tribunal to correct the above-listed errors, or if agreed between the parties, seek interpretation of a part of the award or seek an additional award. 

The provision is limited to correcting errors of inadvertent omissions or mistakes like computation, clerical and typographical which are made in non-essential parts of the award. Any error/ application to correct errors that may require the arbitrator to alter an award beyond computation, clerical or typographical errors will be outside the purview of the provision.  

The Supreme Court in State of Arunachal Pradesh v. M/s. Damani Constructions (2007) held that while Section 33 allows the tribunal to correct any computation, clerical or typographical errors or any other errors of a similar nature, it precludes judicial review of the award. The Court went on to hold that a party seeking a review of the merits of an arbitral award cannot be allowed to take refuge of Section 33 of the Act. Recently, the said view was reiterated by the Supreme Court in the case of Gyan Prakash Arya v. M/s. Titan Industries Ltd (2021). Thus, the scope of Section 33 is narrow and limited and any attempt to traverse beyond the scope i.e., seeking a review of the award will be outside the jurisdiction of the arbitral tribunal. 

Scope of “Interpretation” under Section 33 

Similar to correction, Section 33 contemplates a situation wherein the parties wish to seek interpretation of a part of the award, or a specific point relied upon by the tribunal. As per the Section, either of the parties may, within 30 days from the receipt of the award or any other time period as agreed between them, request the tribunal to give an interpretation of a specific point or part of the award. However, such a request must be made with the consent of the other party. Any such request made without the consent of the other party may be outside the jurisdiction of the tribunal. Furthermore, the scope of interpretation is similar to that of correction under Section 33(1)(a). The Delhi High Court in CMI Ltd. v. BSNL & Anr. (2010). held that a party cannot take refuge under this Section to re-argue its claim which has already been disallowed in the arbitration proceedings. That is to say, a party cannot seek review of the merits of a dispute already disallowed/ allowed in an arbitration under the garb of request for interpretation. 

Scope of “additional award” under Section 33  

Section 33 makes provision for an additional award to be made by the tribunal. The scope of such additional awards was considered by the Supreme Court in McDermott International Inc. v. Burn Standard Co. Ltd. (2011). The Court held that in arbitration where claims to the extent of certain issues were presented but inadvertently omitted by the tribunal while passing the arbitral award, either of the parties to the arbitration may, within 30 days of the receipt of the award, request the tribunal to make such an additional award. However, the same shall be requested with the consent/ notice of the other party.  

Interplay with CPC 

Section 33 of the Act is akin to Section 152 of the CPC which empowers a court to inter alia correct clerical and arithmetical errors, occurring in its judgments, decrees and orders. The exercise of power under Section 152 of the CPC is limited to correction of mistakes by the court.  

The scope of Section 152 of CPC was considered by the Supreme Court in Jayalaxmi Coelho v. Oswald Coelho (2001) as well as NTPC Ltd. v. Marathon Electric Motor India Ltd. (2012), among others. In these decisions, the Supreme Court held that “the exercise of power under Section 152 contemplates the correction of mistakes by the Court of its ministerial actions and does not contemplate of passing of effective judicial orders after the judgment, decree or order.” In other words, an interpretation of Section 152 suggests that a court generally ought not to revisit the merits of a case after its final adjudication. The power of correction available with the Courts under the premise of Section 152 is limited to unintentional mistakes of the court which may prejudice the cause of any party alone could be rectified. 

Conclusion 

The scope of challenge of arbitral awards is already limited and narrow under the Act. The Act does not allow review of the order/ award of the arbitrator in itself and in fact, disallows review on merits of a dispute. Similarly, the remedy provided under Section 33 of the Act i.e., correction and interpretation of award or additional award is limited to correcting errors of similar nature as that of computation, clerical or typographical. 

Moreover, it is clear that if such a remedy requires the arbitrator to hear arguments on facts or law, it would be beyond the scope of Section 33 and cannot be allowed. The decisions of various Courts considered for the above discussion further provide clarity that modification under Section 33 of the Act is in nature of correction of inadvertent errors and cannot alter/ modify/ add new terms to the original award so as to in effect pass a judicial order on the merits of the dispute. Simply put, what is not allowed directly, cannot be allowed indirectly under the garb of Section 33 of the Act. 

Authors: Renjith Nair, Altamash Qureshi and Richa Phulwani 

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