Severability in arbitral awards permits partial setting aside under Section 34 where valid and invalid parts can be separated.

Under Section 34 of the Arbitration and Conciliation Act, 1996, a court may set aside an arbitral award only in part where the valid and invalid portions are severable. The Act's scheme of minimal intervention and finality does not require total annulment merely because one segment is vulnerable, and Section 34(4) supports curing defects rather than mechanically invalidating sustainable findings. The proviso to Section 34(2)(a)(iv) is primarily attached to that clause, but it does not confine the broader power under Section 34; instead, it reinforces a severability-based approach where the matters can be rationally separated.

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Issues: (i) Whether, in proceedings under Section 34 of the Arbitration and Conciliation Act, 1996, the court has power to set aside an arbitral award only in part by applying the doctrine of severability; and (ii) whether the proviso to Section 34(2)(a)(iv) is confined to that clause or controls the wider scope of Section 34(2).

Issue (i): Whether, in proceedings under Section 34 of the Arbitration and Conciliation Act, 1996, the court has power to set aside an arbitral award only in part by applying the doctrine of severability.

Analysis: Section 34 is the sole substantive provision for setting aside an award, and its scheme must be read with the Act's object of minimal court interference, finality, and expeditious dispute resolution. The absence of express words prohibiting partial setting aside is significant. Where the impugned portion of an award is separable from the valid portion, the court is not compelled to nullify the entire award merely because one part is vulnerable. The court distinguished the 1940 Act, under which modification powers were specifically provided, and held that the 1996 Act does not exclude severability where the award is capable of rational segregation. The court also emphasized that Section 34(4) supports a broader remedial approach aimed at curing defects rather than mechanically annulling otherwise sustainable adjudication.

Conclusion: The court held that partial setting aside of an arbitral award is permissible under Section 34 where the valid and invalid parts are severable.

Issue (ii): Whether the proviso to Section 34(2)(a)(iv) is confined to that clause or controls the wider scope of Section 34(2).

Analysis: The proviso was treated as being textually attached to clause (iv), yet its principle was held to illuminate the approach under Section 34 generally. The court reasoned that the proviso does not curtail the court's wider discretion under Section 34(1) and Section 34(2), but in cases falling within clause (iv) it makes severability especially mandatory where matters submitted to arbitration can be separated from matters not submitted. The court rejected the narrower view that partial setting aside is available only under clause (iv) and concluded that the proviso should be read harmoniously with the main provision, not as an exclusion of broader judicial discretion.

Conclusion: The court held that the proviso to Section 34(2)(a)(iv) is primarily referable to that clause, but it does not restrict the court's power under Section 34 to set aside an award partly where the circumstances justify severability.

Final Conclusion: The decision settles that the court's jurisdiction under Section 34 includes the power to sustain the lawful part of an arbitral award while setting aside only the tainted part, and that the proviso to clause (iv) reinforces rather than narrows that remedial discretion.

Ratio Decidendi: Where an arbitral award contains separable valid and invalid components, Section 34 of the Arbitration and Conciliation Act, 1996 permits partial setting aside, and the proviso to Section 34(2)(a)(iv) supports a severability-based approach without confining judicial discretion to that clause alone.

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