The reason for introducing alternatives to dispute resolution is to lessen the burden on courts caused by lengthy litigation. If the entire process during the ADR proceedings is contested in a legal court and the court of law cannot decide, then there is no reason to have these proceedings in the beginning. Arbitration Act section 34 is a law that Arbitration Act section 34 restricts the court’s involvement in cases that are decided by arbitration. Section 34 of the Arbitration and Conciliation Act of 1996 offers a possible avenue for legal action against an arbitral award by courts of law. The legal basis for section 34 of the Arbitration Act of 1996 is provided in clause 2. Anything beyond the limits of section 34 of the Arbitration Act is subject to challenge in the court.

Grounds for Section 34 Arbitration Act, 1996

The Arbitration and Conciliation Act section 34 provides several grounds upon which a court could rescind the arbitral award. The nature of section 34 of the Arbitration Act gives courts of law a particular procedure to follow when evaluating disputes arising from arbitration which is further explained in the following.

Incapacity

Contracting parties should be able to sign the contract. If the legality to contract is questioned, the same applies to the incapacity to enter into arbitration. The reason for this may be a minority, insanity of mind, etc. It is an instance where someone is unable to make an important decision.

The invalidity of the Arbitration Agreement

If the agreement that was the basis of the arbitration process was in itself unenforceable, the arbitral award could not be considered to be a valid one.

Lack of Proper Notice

When one or more of the participants hasn’t been adequately informed of the arbitration proceeding, the arbitrator’s appointment, and so on, the Arbitration Act section 34 allows the cancellation of the decision.

In the case of BSNL and. M/S Nortel India Pvt. Ltd. ^[1], The Apex court ruled the following “There must be a clear notice invoking arbitration setting out the ‘particular dispute’ (including claims/ amounts) which must be received by the other party within a period of 3 years from the rejection of a final bill, failing which, the time bar would prevail.”

Inability to Present the Case

If, or if not, both parties have received an appropriate notification of the arbitration proceeding, Both parties calves before the arbitrator’s presiding officer, i.e., the arbitrator., If one of the parties is initiating arbitration, appointing an arbitrator, and conducting the proceedings by attorneys for arbitration. The other party is unaware of the process and unable to offer their side in the dispute; it’s not a legal procedure. The concept of ‘audi alteram part requires both parties to be adequately considered before reaching a decision.

* Surpassing the Scope of Arbitration

Certain disputes may be resolved by arbitration according to the law if the issue determined by the procedure is outside the scope of arbitration; the Arbitration and Conciliation Act section 34 permits reversing the decision. These types of cases comprise family disputes, criminal offenses, and more.

Composition of Arbitration Tribunal in Question

Section 11 of the Arbitration and Conciliation Act 1996 lays down rules for the selection of arbitrators. According to law, both parties to the arbitration must agree to decide on the arbitral tribunal, regardless of whether it’s the arbitrators or one of them. For instance, if a global commercial arbitration requires one arbitrator from each country in which parties are in dispute and non-compliance can be challenged according to Section 34 of the Arbitration Act.

Conflict with the Agreement

If the conduct of the parties contracting is in conflict with the conditions of the agreement, an arbitral award made by section 34 of the Arbitration Act is liable to be thrown out by the tribunal.

A Conflict with the Public Policy

The reasons for section 34 of the Arbitration Act 1996 specify that the decision taken by the arbitration tribunal be in accordance with the government’s policy in India. If the arbitral award is against the nation’s policy, it may be canceled regardless of who is the party to the arbitration.

The apex court in the case of Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly determined that “From the nature of things the terms “public policies,” “opposed to public policy” or “contrary to public policy” are in a state of confusion and lack a clear definition. The term “public policy” cannot be the official policy or idea of any particular government. It is a term used to describe a subject that has to do with the public good or an interest of the general public. The notion of what constitutes to the good of society or is in public interest or is harmful or injurious to the public interest or the public interest has changed from time-to-time.”

Principles of Natural Justice

There are two basic guidelines based on the principle of natural justice. The first is that no person can become a judge for their case and that an individual is entitled to be heard before deciding. If one of these rules is not adhered to when conducting the arbitration, and the judge may invalidate the conclusion of such proceedings.