Correction Of Contradictory Operative Direction Does Not Amount To Review Of Award: Patna High Court

The Patna High Court on 18 June held that an arbitral tribunal may correct an apparent contradiction or computation error under Section 33 of the Arbitration and Conciliation Act, 1996, where the correction aligns the operative portion of the award with the tribunal's findings and does not amount to a review on merits.

A Division Bench of Justices Rajeev Ranjan Prasad and Kumar Manish dismissed the appeal filed by Ganesh Foundry and Castings Limited and upheld the additional arbitral award as well as the Commercial Court's order refusing to interfere with it. It observed:

“To this Court, it appears that the cluster of words such as 'any computation errors, any clerical or typographical errors or any other errors of a similar nature occurring in the award' are to be given a purposive interpretation in the context in which this provision has been incorporated in the statute. In a world of commercial exigencies this provision has to be interpreted in such a way that it serves the purpose behind incorporating Section 33 of the Act of 1996.”

The dispute arose from electricity supply to Ganesh Foundry's manufacturing unit at Muzaffarpur. The Bihar State Electricity Board conducted an inspection, alleged theft of electricity, disconnected supply, lodged an FIR, and issued a supplementary bill dated 13 September 1995 for Rs. 39.41 crore.

Ganesh Foundry first approached the Patna High Court seeking restoration of electricity. The Court remanded the matter and directed the Board Chairman to take a decision. The Chairman passed an order on 15 May 1996, which the company challenged again before the High Court.

During subsequent proceedings, the High Court referred the dispute to arbitration by consent of parties. Former Patna High Court judge Justice P.S. Sahay presided over the tribunal, assisted by technical experts Umesh Chandra Verma and B.P. Singha.

The tribunal passed its award on 4 October 1998 and accepted Singha's report, holding that tariff under Clause 16.9 had to be assessed on the basis of total KVA reflected in independent test reports.

The Bihar State Electricity Board then filed an application under Section 33 of the 1996 Act on 5 November 1998, contending that the operative portion of the award conflicted with the tribunal's findings on tariff computation and required correction. Ganesh Foundry opposed the application, arguing that it sought a substantive review beyond the limited scope of Section 33.

The tribunal allowed the application and issued an additional award on 1 December 1998, modifying the operative portion to remove the inconsistency.

Ganesh Foundry challenged the additional award under Section 34 before the Commercial Court, Patna. By order dated 20 May 2025, the Commercial Court dismissed the challenge and held that no ground under Sections 34(2) or 34(2A) was made out.

Before the High Court, Ganesh Foundry argued that the tribunal had exceeded its jurisdiction by altering the substance of the award, while the Board maintained that it had only corrected an apparent inconsistency between the findings and operative directions.

It agreed with the Board and held that the tribunal only rectified an error apparent on the face of the record. It noted that while the tribunal had accepted the expert report and directed assessment based on total KVA, the operative portion reflected a different basis, creating a clear contradiction.

Further, the Bench observed that the correction merely aligned the operative directions with the findings already recorded and did not amount to a merits-based review. It noted:

“We are of the view that the learned Arbitral Tribunal has only corrected the error which had crept in the last portion of the order which was apparent on the face of it. The learned Commercial Court, Patna has taken a correct view of the matter by refusing to interfere with the additional award.”

Accordingly, the High Court dismissed the appeal and upheld both the additional arbitral award and the Commercial Court's order.

Appearances for Appellant (M/s Ganesh Foundry and Castings Limited): Advocates Suraj Samdarshi, Avinash Shekhar, Simran Kumari and Abhilasha Jha.

Appearances for Respondents (Bihar State Electricity Board & Ors.): Advocates Kunal Tiwary and Vivek Prasad.