No Automatic Remand After Arbitral Award Is Set Aside U/S 34 Arbitration Act: Kerala High Court
The judgment comes in a land acquisition dispute under National Highways Act, 1956 involving NH-66 widening in Kozhikode
Justice C. Jayachandran, Kerala High Court
The Kerala High Court has held that setting aside an arbitral award does not automatically result in a remand of the matter to the arbitrator, unless recourse is taken under Section 34(4) of the of the Arbitration and Conciliation Act, 1996 (Act).
The matter pertained to a writ petition arising out of a compensation dispute under the National Highways Act, 1956, where land belonging to a 69-year-old petitioner was acquired for widening of National Highway-66 in Kozhikode.
Justice C. Jayachandran while placing reliance on Saisudhir Energy Ltd. v. NTPC Vidyut Vyapar Nigam Ltd. [MANU/SC/0100/2026] observed, “…the court can only set aside the Award and cannot modify the same, except in respect of arithmetical and clerical errors…It is true that Section 34(4) affords scope for a limited remand, so as to afford an opportunity to resume the arbitral proceedings, eliminating the ground for setting aside the arbitral Award. The obvious purpose is to afford the parties an opportunity, so as to avoid the ultimate setting aside of an arbitral Award on technical grounds. If the infirmity, which is canvassed as a ground in a petition under Section 34, is curable in nature, let that be cured, appears to be the intention of Section 34(4), so that the Award can be sustained ultimately. In the instant case, recourse to Section 34(4) has not been made by any of the parties. This Court also takes stock of the fact that in Ext.P5, the learned District Judge has merely set aside the Award, without mentioning or referring anything about the remand or remit, presumably for the reason that there exists no such power”.
P. Sathisan appeared for the petitioner and N.J. Ashwin, Central Government Counsel appeared for the respondent.
The petitioner’s land measuring 0.0316 hectares was acquired, and an award was passed by the Competent Authority for Land Acquisition (CALA) under Section 3G of the NHAI Act. Dissatisfied with the Basic Valuation Report, the National Highways Authority of India (NHAI) invoked arbitration under Section 3G(5) of the Act.
The District Collector, acting as Arbitrator, reduced the compensation, therefore, the petitioner challenged this arbitral award under Section 34 of the Arbitration Act before the District Court, Kozhikode.
Thereafter, the District Court set aside the arbitral award under Section 34(2)(a)(iii), holding that the petitioner was not given adequate opportunity to present his case. The High Court later upheld this order in arbitration appeal.
Subsequent to which, the petitioner approached the High Court seeking disbursement of compensation as per the original award, contending that once the arbitral award was set aside, the initial award revived.
Now, NHAI argued that since the arbitral award was set aside on the ground that the petitioner was denied proper opportunity, the arbitration proceedings automatically revived. It relied on the Supreme Court’s judgment in Gayatri Balasamy v. ISG Novasoft Technologies Ltd. 2025 KHC Online 6421 :: 2025 INSC 605 to contend that remand was permissible in such situations.
The Court, however, rejecting this contention, held that Section 34 only empowers a court to set aside an arbitral award and does not confer a general power to remand. The Court said that a limited remand is permissible only under Section 34(4), and that too when specifically sought during the pendency of Section 34 proceedings.
The Bench observed that neither party had invoked Section 34(4) during the Section 34 proceedings before the District Court. The arbitral award had been simply set aside, without any direction of remand and, therefore, there was no automatic revival of arbitration proceedings.
The Court further noted that the Supreme Court’s ruling in Gayatri Balasamy dealt specifically with Section 34(4) and did not support the argument that remand is implicit whenever an award is set aside under Section 34(2)(a)(iii).
The Court noting that the petitioner’s claim could not be indefinitely stalled, especially when the land was acquired in 2020, directed that if NHAI does not obtain favourable orders through review within 45 days, the compensation as per the original award of CALA must be disbursed. The Special Deputy Collector was directed to complete the disbursement within one month thereafter.
Cause Title: Raghavan V.T v. Union Of India & Ors. [Neutral Citation: 2026:KER:10961]
Appearances:
Petitioner: P. Sathisan, Shibu B.S, Biju P.Paul, Alvin Jewel S.S., Vidhya T.U., Antija James, Swaliha Selmi T.R., Leena Varghese, Razak M., Advocates.
Respondent: N.J. Ashwin, Central Government Counsel, Ajith V, Advocates.