Section 34 of ACA : Section 34: Application For Setting Aside Arbitral Awards

Explanation using Example

Imagine a company, XYZ Corp, entered into a contract with ABC Ltd. for the supply of machinery. A dispute arose regarding the quality of machinery supplied, and the matter went to arbitration as per the contract's arbitration clause. The arbitral tribunal ruled in favor of ABC Ltd.

XYZ Corp believes the award should be set aside because they were not given proper notice of the arbitral proceedings, hindering their ability to present their case effectively. XYZ Corp files an application in the court under Section 34 of the Arbitration and Conciliation Act, 1996, within three months of receiving the award, claiming the arbitral procedure was not followed correctly as per their agreement.

The court reviews the application to determine if XYZ Corp's claims meet the criteria under Section 34 for setting aside the arbitral award. If the court finds merit in XYZ Corp's application, it may set aside the arbitral award, provided the procedural irregularity is proven and is significant enough to affect the award's outcome.