Introduction
Once an arbitrator delivers a final award, they lose jurisdiction and cannot modify or clarify it unless specifically permitted by law. The arbitrator becomes functus officio after the passing of the award. The Arbitration and Conciliation Act, 1996 (the 1996 Act), under Section 33, generally limits arbitrator corrections to 30 days. Further, the parties may challenge the award under Section 34 of the 1996 Act.
The issue of post-award clarification beyond 30 days was recently discussed in detail by the Hon'ble Supreme Court in North Delhi Municipal Corporation v. S.A. Builders Ltd.1 where the court upheld that such clarification is valid when expressly permitted by the Court.
Factual Background
North Delhi Municipal Corporation (NDMC) awarded a contract to S.A. Builders Ltd. (the Respondent) for construction work related to a flyover project. Due to the NDMC's failure to make the payment, the S.A. Builders' Ltd. initiated Arbitration proceedings under Section 20 of the 1996 Act.
After the arbitral award was granted, a dispute arose with regards the post-award interest. During the execution proceedings, the Delhi High Court referred the matter to a Division Bench, which permitted the S.A. Builders Ltd. to approach the Arbitrator for clarification. NDMC challenged this order stating that:
- The Arbitrator had become functus officio.
- The clarification amounted to an unauthorised modification of the award.
- The arbitrator could not issue a clarification after six years.
Legal Provisions
Under Section 33 of the 1996 Act, an arbitrator can correct clerical or typographical errors within 30 days of the award, but no substantial modification is permitted. Based on this, the NDMC argued that the arbitrator became functus officio after passing the award and thus, had no jurisdiction to issue a clarification more than six years after passing the final award.
However, the Hon'ble Supreme Court clarified that the court had expressly permitted the clarification, making it valid despite the expiry of the 30 day period. The Court held that the Section 33 does not override judicial authority, and the court orders may allow post-award clarifications even after 30 days.
Validity of the Clarification Issued After the Expiry of the 30-day Period
In the NDMC case, the Division Bench expressly allowed the respondent to approach the arbitrator for clarification regarding the post-award interest. It was clear that the NDMC had also participated in the clarificatory proceeding initiated by the respondent before the arbitrator. The arbitrator clarified that post-award interest shall be payable on the awarded sum i.e. the amount of claim awarded (principal amount) plus interest for the pre-reference period and pendente lite upto the date of the award at the rate mentioned thereunder.
The NDMC did not challenge the clarification under Section 34 of the 1996 Act. Instead, the NDMC contested the same in the execution proceeding before the Ld. Single Judge. Since the Division Bench had expressly permitted the respondent to seek clarification from the arbitrator, the NDMC could no longer question whether the Respondent had rightfully approached the arbitrator to seek clarification or that the arbitrator had become functus officio.
Moreover, the impugned order passed by the Division Bench was a consent order, as expressly stated therein. Accordingly, the clarification sought for and issued by the learned arbitrator in this case was covered by the expression "unless another period of time has been agreed upon by the parties" appearing in Section 33 (1) of the 1996 Act. The Supreme Court rejected NDMC's objections and held that the issue had already attained finality. Additionally, NDMC's claim that the arbitrator had no jurisdiction was barred by res judicata, as the Supreme Court had already upheld the validity of the clarification in earlier rulings.
Legal Implications
The Hon'ble Supreme Court's decision in the NDMC case entails significant legal implications in arbitration proceedings in India-
- Post-award Clarifications may be permitted by the
Court
The judgement provides an enhanced scope for parties to seek clarification from the Arbitral tribunal even after the expiry of the 30-day period under Section 33 of the 1996 Act. Thus, Section 33 does not limit judicial authority to direct arbitrators for necessary clarifications.. - Enforcement of Arbitral Awards
The case also establishes that the 30- day limitation under Section 33 may be overridden by the court's explicit permission. This ruling contributes significantly to arbitration jurisprudence in India by balancing procedural limitations with practical needs. - Mutual Agreement of Parties
The NDMC case lays great emphasis on the mutual agreement of parties and promotes collaboration rather than conflict. The case also clarifies that the mutual agreement requirement under Section 33 of the 1996 Act can be satisfied through court proceedings or a consent order. Once an Arbitral Award is upheld at all the appellate levels, it cannot be challenge again during execution.
Conclusion
In light of the NDMC case, the legal position on clarifications issued by the arbitrator after the expiry of the 30-day period can be summarized as follows:
- Once a final award has been passed, an arbitrator cannot modify the same. The arbitrator becomes functus officio once the award has been passed.
- Under Section 33 of the Arbitration and Conciliation Act, 1996, an arbitrator is generally entitled to issue clarifications and corrections within 30 days from the receipt of the arbitral award. Clarifications beyond this period require court approval—mutual consent of the parties alone is insufficient to extend the arbitrator's jurisdiction.
- Mutual agreement of the parties may be achieved through court proceedings.
- Any Challenge to the clarificatory proceedings must be raised early and at the appropriate stage, as delayed objections may be barred by res judicata.
- The court's explicit permission may allow parties to seek clarification after the expiry of the 30-day period.
Footnote
1. Civil Appeal No. 1878 of 2024
Originally published 31st Mar 2025
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