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"Only in a case of arithmetical and/or clerical error, the award (an arbitral award) can be modified and such errors only can be corrected", held a division bench of the Supreme Court on Monday.

In the case before the Supreme Court, the appellant, one Gyan Prakash Arya had entered into an agreement with M/s Titan Industries Limited.

A dispute arose between the parties relating to recovery of pure gold weighing 3648.80 grams said to have been in the possession of Arya.

Titan Industries invoked the arbitration clause contained in their agreement and the arbitrator passed an award directing Arya to return 3648.80 grams of pure gold along with interest @ 18% per annum calculating the value of gold at Rs.740 per gram, within three months. 

Subsequently, Titan Industries filed an application under Section 33 of the 1996 Act and requested to modify the award by correcting computational/arithmetical/clerical error by deleting “at Rs. 740 per gram as claimed in the claim statement” at page 14, second para, line 20 and to delete “Rs.740.00 per gram” at page 17, para 15(b), line 3, and substitute the same by “Rs.20,747/- per 10 grams” at page 17, para 15(b), line 3.

After this application was allowed, Arya filed an arbitration suit under Section 34 of the 1996 Act before the City Civil Court which came to be dismissed. Further, appeal under Section 37 of the 1996 Act was also dismissed by the Karnataka High Court.

Justices MR Shah and BV Nagarathna noted that the original award was passed considering the original claim made by the claimant and as per the statement of the claim made, and therefore subsequently allowing the application under Section 33 of the Arbitration and Conciliation Act, 1996 to modify the original award, was not sustainable.

"In the present case, it cannot be said that there was any arithmetical and/or clerical error in the original award passed by the learned arbitrator. What was claimed by the original claimant in the statement of claim was awarded. Therefore, the order passed by the learned arbitrator on an application filed under Section 33 of the 1996 Act and thereafter modifying the original award cannot be sustained", held the Bench.

The Court further found that the order passed by the arbitrator in the application under Section 33 was beyond the scope and ambit of the said provision.

Accordingly, the impugned judgment and orders passed by the High Court and City Civil Court along with the order passed by the arbitrator modifying the original award were quashed and set aside.

The original award passed by the arbitrator also stood restored.

Cause Title: Gyan Prakash Arya v. M/s Titan Industries Limited