33. Correction and interpretation of award; additional award.—
(1) Within thirty days from the
receipt of the arbitral award, unless another period of time has been agreed upon by the parties—
(a) a party, with notice to the other party, may request the arbitral tribunal to correct any
computation errors, any clerical or typographical errors or any other errors of a similar nature
occurring in the award;
(b) if so agreed by the parties, a party, with notice to the other party, may request the arbitral
tribunal to give an interpretation of a specific point or part of the award.
(2) If the arbitral tribunal considers the request made under sub-section
(1) to be justified, it shall
make the correction or give the interpretation within thirty days from the receipt of the request and the
interpretation shall form part of the arbitral award.
(3) The arbitral tribunal may correct any error of the type referred to in clause
(a) of sub-section
(1),
on its own initiative, within thirty days from the date of the arbitral award.
(4) Unless otherwise agreed by the parties, a party with notice to the other party, may request, within
thirty days from the receipt of the arbitral award, the arbitral tribunal to make an additional arbitral award
as to claims presented in the arbitral proceedings but omitted from the arbitral award.
(5) If the arbitral tribunal considers the request made under sub-section
(4) to be justified, it shall
make the additional arbitral award within sixty days from the receipt of such request.
(6) The arbitral tribunal may extend, if necessary, the period of time within which it shall make a
correction, give an interpretation or make an additional arbitral award under sub-section
(2) or
sub-section
(5).
(7) Section 31 shall apply to a correction or interpretation of the arbitral award or to an additional
arbitral award made under this section.
CHAPTER VII
Recourse against arbitral award
34. Application for setting aside arbitral award.—
(1) Recourse to a Court against an arbitral award
may be made only by an application for setting aside such award in accordance with sub-section
(2) and
sub-section
(3).
(2) An arbitral award may be set aside by the Court only if—
21
(a) the party making the application 1[establishes on the basis of the record of the arbitral tribunal
that]—
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it
or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an
arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms
of the submission to arbitration, or it contains decisions on matters beyond the scope of the
submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those
not so submitted, only that part of the arbitral award which contains decisions on matters not
submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance
with the agreement of the parties, unless such agreement was in conflict with a provision of this
Part from which the parties cannot derogate, or, failing such agreement, was not in accordance
with this Part; or
(b) the Court finds that—
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law
for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
2
[Explanation 1.—For the avoidance of any doubt, it is clarified that an award is in conflict with the
public policy of India, only if,—
(i) the making of the award was induced or affected by fraud or corruption or was in violation
of section 75 or section 81; or
(ii) it is in contravention with the fundamental policy of Indian law; or
(iii) it is in conflict with the most basic notions of morality or justice.
Explanation 2.—For the avoidance of doubt, the test as to whether there is a contravention with the
fundamental policy of Indian law shall not entail a review on the merits of the dispute.]
3
[(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations,
may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality
appearing on the face of the award:
Provided that an award shall not be set aside merely on the ground of an erroneous application of the
law or by reappreciation of evidence.]
(3) An application for setting aside may not be made after three months have elapsed from the date on
which the party making that application had received the arbitral award or, if a request had been made
under section 33, from the date on which that request had been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from
making the application within the said period of three months it may entertain the application within a
further period of thirty days, but not thereafter.
(4) On receipt of an application under sub-section
(1), the Court may, where it is appropriate and it is
so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the
1. Subs. by Act 33 of 2019, s. 7, for “furnishes proof that” (w.e.f. 30-8-2019).
2. Subs. by Act 3 of 2016, s. 18, for the Explanation (w.e.f. 23-10-2015).
3. Ins. by s. 18, ibid. (w.e.f. 23-10-2015).
22
arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the
opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.
1
[
(5) An application under this section shall be filed by a party only after issuing a prior notice to the
other party and such application shall be accompanied by an affidavit by the applicant endorsing
compliance with the said requirement.
(6) An application under this section shall be disposed of expeditiously, and in any event, within a
period of one year from the date on which the notice referred to in sub-section
(5) is served upon the other
party.]
STATE AMENDMENT
Jammu and Kashmir and Ladakh (UTs).
Amendment of section 34.—
(i) after sub-section
(2), insert the following sub-section, namely:—
“(2A) An arbitral award may also be set aside by the Court, if the Court finds that the award is
vitiated by patent illegality appearing on the face of the award:
Provided that an award shall not be set aside merely on the ground of an erroneous application of
the law or by re-appreciation of evidence.”;
(ii) in sub-section
(3),—
(i) for “three months” substitute, “six months”;
(ii) in proviso thereto, for, “three months” and “thirty days” substitute respectively “six months”
and “sixty days”.
[Vide the Jammu and Kashmir Reorganization (Adaptation of Central Laws) Order, 2020, notification
No. S.O. 1123(E) dated (18-3-2020) and Vide Union Territory of Ladakh Reorganisation (Adaptation of
Central Laws) Order, 2020, notification No. S.O. 3774(E), dated (23-10-2020).]
CHAPTER VIII
Finality and enforcement of arbitral awards
35. Finality of arbitral awards.—Subject to this Part an arbitral award shall be final and binding on
the parties and persons claiming under them respectively.
2
[36. Enforcement.—
(1) Where the time for making an application to set aside the arbitral award
under section 34 has expired, then, subject to the provisions of sub-section
(2), such award shall be
enforced in accordance with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), in the same
manner as if it were a decree of the court.
(2) Where an application to set aside the arbitral award has been filed in the Court under section 34,
the filing of such an application shall not by itself render that award unenforceable, unless the Court
grants an order of stay of the operation of the said arbitral award in accordance with the provisions of
sub-section
(3), on a separate application made for that purpose.
(3) Upon filing of an application under sub-section
(2) for stay of the operation of the arbitral award,
the Court may, subject to such conditions as it may deem fit, grant stay of the operation of such award for
reasons to be recorded in writing:
1. Ins. by Act 3 of 2016, s. 18 (w.e.f. 23-10-2015).
2. Subs. by s. 19, ibid., for section 36 (w.e.f. 23-10-2015).
23
Provided that the Court shall, while considering the application for grant of stay in the case of an
arbitral award for payment of money, have due regard to the provisions for grant of stay of a money
decree under the provisions of the Code of Civil Procedure, 1908 (5 of 1908).]
1
[Provided further that where the Court is satisfied that a Prima facie case is made out that,—
(a) the arbitration agreement or contract which is the basis of the award; or
(b) the making of the award,
was induced or effected by fraud or corruption, it shall stay the award unconditionally pending disposal of
the challenge under section 34 to the award.
Explanation.—For the removal of doubts, it is hereby clarified that the above proviso shall apply to
all court cases arising out of or in relation to arbitral proceedings, irrespective of whether the arbitral or
court proceedings were commenced prior to or after the commencement of the Arbitration and
Conciliation (Amendment) Act, 2015 (3 of 2016).]
CHAPTER IX
Appeals
37. Appealable orders.—
(1) 2[Notwithstanding anything contained in any other law for the time
being in force, an appeal] shall lie from the following orders (and from no others) to the Court authorised
by law to hear appeals from original decrees of the Court passing the order, namely:—
3
[
(a) refusing to refer the parties to arbitration under section 8;
(b) granting or refusing to grant any measure under section 9;
(c) setting aside or refusing to set aside an arbitral award under section 34.]
(2) Appeal shall also lie to a court from an order of the arbitral tribunal—
(a) accepting the plea referred to in sub-section
(2) or sub-section
(3) of section 16; or
(b) granting or refusing to grant an interim measure under section 17.
(3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this
section shall affect or takeaway any right to appeal to the Supreme Court.
CHAPTER X
Miscellaneous
38. Deposits.—
(1) The arbitral tribunal may fix the amount of the deposit or supplementary deposit,
as the case may be, as an advance for the costs referred to in sub-section
(8) of section 31, which it
expects will be incurred in respect of the claim submitted to it:
Provided that where, apart from the claim, a counter-claim has been submitted to the arbitral tribunal,
it may fix separate amount of deposit for the claim and counter-claim.
(2) The deposit referred to in sub-section
(1) shall be payable in equal shares by the parties:
Provided that where one party fails to pay his share of the deposit, the other party may pay that share:
Provided further that where the other party also does not pay the aforesaid share in respect of the
claim or the counter-claim, the arbitral tribunal may suspend or terminate the arbitral proceedings in
respect of such claim or counter-claim, as the case may be.
(3) Upon termination of the arbitral proceedings, the arbitral tribunal shall render an accounting to the
parties of the deposits received and shall return any unexpended balance to the party or parties, as the case
may be.
1. Ins. by Act 3 of 2021, s. 2 (w.e.f. 23-10-2015).
2. Subs. by Act 33 of 2019, s. 8, for “An appeal” (w.e.f. 30-8-2019).
3. Subs. by Act 3 of 2016, s. 20, for clauses
(a) and
(b) (w.e.f. 23-10-2015).
24
39. Lien on arbitral award and deposits as to costs.—
(1) Subject to the provisions of
sub-section
(2) and to any provision to the contrary in the arbitration agreement, the arbitral tribunal shall
have a lien on the arbitral award for any unpaid costs of the arbitration.
(2) If in any case an arbitral tribunal refuses to deliver its award except on payment of the costs
demanded by it, the Court may, on an application in this behalf, order that the arbitral tribunal shall
deliver the arbitral award to the applicant on payment into Court by the applicant of the costs demanded,
and shall, after such inquiry, if any, as it thinks fit, further order that out of the money so paid into Court
there shall be paid to the arbitral tribunal by way of costs such sum as the Court may consider reasonable
and that the balance of the money, if any, shall be refunded to the applicant.
(3) An application under sub-section
(2) may be made by any party unless the fees demanded have
been fixed by written agreement between him and the arbitral tribunal, and the arbitral tribunal shall be
entitled to appear and be heard on any such application.
(4) The Court may make such orders as it thinks fit respecting the costs of the arbitration where any
question arises respecting such costs and the arbitral award contains no sufficient provision concerning
them.
40. Arbitration agreement not to be discharged by death of party thereto.—
(1) An arbitration
agreement shall not be discharged by the death of any party thereto either as respects the deceased or as
respects any other party, but shall in such event been forceable by or against the legal representative of
the deceased.
(2) The mandate of an arbitrator shall not be terminated by the death of any party by whom he was
appointed.
(3) Nothing in this section shall affect the operation of any law by virtue of which any right of action
is extinguished by the death of a person.
41. Provisions in case of insolvency.—
(1) Where it is provided by a term in a contract to which an
insolvent is a party that any dispute arising there out or in connection therewith shall be submitted to
arbitration, the said term shall, if the receiver adopts the contract, be enforceable by or against him so far
as it relates to any such dispute.
(2) Where a person who has been adjudged an insolvent had, before the commencement of the
insolvency proceedings, become a party to an arbitration agreement, and any matter to which the
agreement applies is required to be determined in connection with, or for the purposes of, the insolvency
proceedings, then, if the case is one to which sub-section
(1) does not apply, any other party or the
receiver may apply to the judicial authority having jurisdiction in the insolvency proceedings for an order
directing that the matter in question shall be submitted to arbitration in accordance with the arbitration
agreement, and the judicial authority may, if it is of opinion that, having regard to all the circumstances of
the case, the matter ought to be determined by arbitration, make an order accordingly.
(3) In this section the expression “receiver” includes an Official Assignee.
42. Jurisdiction.—Notwithstanding anything contained elsewhere in this Part or in any other law for
the time being in force, where with respect to an arbitration agreement any application under this Part has
been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all
subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that
Court and in no other Court.
1
[42A. Confidentiality of information.—Notwithstanding anything contained by any other law for
the time being in force, the arbitrator, the arbitral institution and the parties to the arbitration agreement
shall maintain confidentially of all arbitral proceedings except award where its disclosure is necessary for
the purpose of implementation and enforcement of award.
42B. Protection of action taken in good faith.—No suit or other legal proceedings shall lie against
the arbitrator for anything which is in good faith done or intended to be done under this Act or the rules or
regulations made thereunder.]
1. Ins. by Act 33 of 2019, s. 9 (w.e.f. 30-8-2019).
25
43. Limitations.—
(1) The Limitation Act, 1963 (36 of 1963), shall apply to arbitrations as it applies
to proceedings in court.
(2) For the purposes of this section and the Limitation Act, 1963 (36 of 1963), an arbitration shall be
deemed to have commenced on the date referred to in section 21.
(3) Where an arbitration agreement to submit future disputes to arbitration provides that any claim to
which the agreement applies shall be barred unless some step to commence arbitral proceedings is taken
within a time fixed by the agreement, and a dispute arises to which the agreement applies, the Court, if it
is of opinion that in the circumstances of the case undue hardship would otherwise be caused, and
notwithstanding that the time so fixed has expired, may on such terms, if any, as the justice of the case
may require, extend the time for such period as it thinks proper.
(4) Where the Court orders that an arbitral award be set aside, the period between the commencement
of the arbitration and the date of the order of the Court shall be excluded in computing the time prescribed
by the Limitation Act, 1963 (36 of 1963), for the commencement of the proceedings (including
arbitration) with respect to the dispute so submitted.
STATE AMENDMENT
Bihar.—
Omission of sub-section
(3) of Section-43 of the Arbitration and Conciliation Act, 1996.—Sub.
by Section-3 of the Section 43 of the said Act shall be omitted.
[Vide Bihar Act 20 of 2002, s. 2]
1
[PART IA
ARBITRATION COUNCIL OF INDIA
43A. Definitions. In this Part, unless the context otherwise requires,—
(a) “Chairperson” means the Chairperson of the Arbitration Council of India appointed under
clause
(a) of sub-section
(1) of section 43C;
(b) “Council” means the Arbitration Council of India established under section 43B;
(c) “Member” means a Member of the Council and includes the Chairperson.
43B. Establishment and incorporation of Arbitration Council of India.—
(1) The Central
Government shall, by notification in the Official Gazette, establish, for the purposes of this Act, a Council
to be known as the Arbitration Council of India to perform the duties and discharge the functions under
this Act.
(2) The Council shall be a body corporate by the name aforesaid, having perpetual succession and a
common seal, with power, subject to the provisions of this Act, to acquire, hold and dispose of property,
both movable and immovable, and to enter into contract, and shall, by the said name, sue or be sued.
(3) The head office of the Council shall be at Delhi.
(4) The Council may, with the prior approval of the Central Government, establish offices at other
places in India.
43C. Composition of Council.––
(1) The Council shall consist of the following Members, namely:––
(a) a person, who has been, a Judge of the Supreme Court or, Chief Justice of a High Court or, a
Judge of a High Court or an eminent person, having special knowledge and experience in the conduct
1. Ins. by Act 33 of 2019, s. 10 (w.e.f. 12-10-2023).
26
or administration of arbitration, to be appointed by the Central Government in consultation with the
Chief Justice of India–Chairperson;
(b) an eminent arbitration practitioner having substantial knowledge and experience in
institutional arbitration, both domestic and international, to be nominated by the Central
Government–Member;
(c) an eminent academician having experience in research and teaching in the field of arbitration
and alternative dispute resolution laws, to be appointed by the Central Government in consultation
with the Chairperson–Member;
(d) Secretary to the Government of India in the Department of Legal Affairs, Ministry of Law and
Justice or his representative not below the rank of Joint Secretary–Member, ex officio;
(e) Secretary to the Government of India in the Department of Expenditure, Ministry of Finance
or his representative not below the rank of Joint Secretary– Member, ex officio;
(f) one representative of a recognised body of commerce and industry, chosen on rotational basis
by the Central Government–Part-time Member; and
(g) Chief Executive Officer-Member-Secretary, ex officio.
(2) The Chairperson and Members of the Council, other than ex officio Members, shall hold office as
such, for a term of three years from the date on which they enter upon their office:
Provided that no Chairperson or Member, other than ex officio Member, shall hold office as such after
he has attained the age of seventy years in the case of Chairperson and sixty-seven years in the case of
Member.
(3) The salaries, allowances and other terms and conditions of the Chairperson and Members referred
to in clauses
(b) and
(c) of sub-section
(1) shall be such as may be prescribed by the Central Government.
(4) The Part-time Member shall be entitled to such travelling and other allowances as may be
prescribed by the Central Government.
43D. Duties and functions of Council.––
(1) It shall be the duty of the Council to take all such
measures as may be necessary to promote and encourage arbitration, mediation, conciliation or other
alternative dispute resolution mechanism and for that purpose to frame policy and guidelines for the
establishment, operation and maintenance of uniform professional standards in respect of all matters
relating to arbitration.
(2) For the purposes of performing the duties and discharging the functions under this Act, the
Council may—
(a) frame policies governing the grading of arbitral institutions;
(b) recognise professional institutes providing accreditation of arbitrators;
(c) review the grading of arbitral institutions and arbitrators;
(d) hold training, workshops and courses in the area of arbitration in collaboration of law firms,
law universities and arbitral institutes;
(e) frame, review and update norms to ensure satisfactory level of arbitration and conciliation;
(f) act as a forum for exchange of views and techniques to be adopted for creating a platform to
make India a robust centre for domestic and international arbitration and conciliation;
(g) make recommendations to the Central Government on various measures to be adopted to
make provision for easy resolution of commercial disputes;
(h) promote institutional arbitration by strengthening arbitral institutions;
27
(i) conduct examination and training on various subjects relating to arbitration and conciliation
and award certificates thereof;
(j) establish and maintain depository of arbitral awards made in India;
(k) make recommendations regarding personnel, training and infrastructure of arbitral institutions;
and
(l) such other functions as may be decided by the Central Government.
43E. Vacancies, etc., not to invalidate proceedings of Council.—No act or proceeding of the
Council shall be invalid merely by reason of—
(a) any vacancy or any defect, in the constitution of the Council;
(b) any defect in the appointment of a person acting as a Member of the Council; or
(c) any irregularity in the procedure of the Council not affecting the merits of the case.
43F. Resignation of Members.—The Chairperson or the Full-time or Part-time Member may, by
notice in writing, under his hand addressed to the Central Government, resign his office:
Provided that the Chairperson or the Full-time Member shall, unless he is permitted by the Central
Government to relinquish his office sooner, continue to hold office until the expiry of three months from
the date of receipt of such notice or until a person duly appointed as his successor enters upon his office
or until the expiry of his term of office, whichever is earlier.
43G. Removal of Member.––
(1) The Central Government may, remove a Member from his office if
he––
(a) is an undischarged insolvent; or
(b) has engaged at any time (except Part-time Member), during his term of office, in any paid
employment; or
(c) has been convicted of an offence which, in the opinion of the Central Government, involves
moral turpitude; or
(d) has acquired such financial or other interest as is likely to affect prejudicially his functions as
a Member; or
(e) has so abused his position as to render his continuance in office prejudicial to the public
interest; or
(f) has become physically or mentally incapable of acting as a Member.
(2) Notwithstanding anything contained in sub-section
(1), no Member shall be removed from his
office on the grounds specified in clauses
(d) and
(e) of that sub-section unless the Supreme Court, on a
reference being made to it in this behalf by the Central Government, has, on an inquiry, held by it in
accordance with such procedure as may be prescribed in this behalf by the Supreme Court, reported that
the Member, ought on such ground or grounds to be removed.
43H. Appointment of experts and constitution of Committees thereof.––The Council may,
appoint such experts and constitute such Committees of experts as it may consider necessary to discharge
its functions on such terms and conditions as may be specified by the regulations.
43-I. General norms for grading of arbitral institutions.––The Council shall make grading of
arbitral institutions on the basis of criteria relating to infrastructure, quality and calibre of arbitrators,
performance and compliance of time limits for disposal of domestic or international commercial
arbitrations, in such manner as may be specified by the regulations.
28
1
[43J. Norms for accreditation of arbitrators.—The qualifications, experience and norms for
accreditation of arbitrators shall be such as may be specified by the regulations.]
43K. Depository of awards.––The Council shall maintain an ele
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