Arbitration remand limits and MSME deposit compliance clarified: court cannot remand after setting aside an award, and must assess deposit calculations.

Section 34(4) of the Arbitration and Conciliation Act, 1996 permits only a limited adjournment so the arbitral tribunal may resume proceedings or cure a ground for setting aside an award; it does not empower the court to remand the matter to the arbitrator after the award has already been set aside. The document also notes that, under Section 19 of the Micro, Small and Medium Enterprises Development Act, 2006, the question whether seventy-five per cent of the award amount has been computed and deposited should be examined by the objecting court after both sides place their calculations, and time may then be granted for compliance.

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Issues: (i) Whether the court could remand the matter back to the arbitrator after setting aside the arbitral award under Section 34(4) of the Arbitration and Conciliation Act, 1996; (ii) Whether the question of computing and depositing seventy-five per cent of the award amount under Section 19 of the Micro, Small and Medium Enterprises Development Act, 2006 should be determined by the objecting court after giving both sides an opportunity.

Issue (i): Whether the court could remand the matter back to the arbitrator after setting aside the arbitral award under Section 34(4) of the Arbitration and Conciliation Act, 1996.

Analysis: Section 34(4) permits an adjournment so that the arbitral tribunal may resume proceedings or take steps to remove the ground for setting aside the award. It does not confer a power on the court to remand the matter to the arbitrator after the award has already been set aside. That course is available only within the limited framework of adjournment contemplated by the provision, and not after final setting aside of the award.

Conclusion: The remand order was unsustainable and was set aside.

Issue (ii): Whether the question of computing and depositing seventy-five per cent of the award amount under Section 19 of the Micro, Small and Medium Enterprises Development Act, 2006 should be determined by the objecting court after giving both sides an opportunity.

Analysis: A dispute existed regarding whether the amount already deposited satisfied the statutory requirement of seventy-five per cent of the award. The proper course was to permit both sides to place their calculations before the objecting court, which would then determine the correct amount and grant time for deposit in accordance with the statute.

Conclusion: The issue of computation and compliance was remitted to the objecting court for fresh determination.

Final Conclusion: The appellant obtained relief against the unlawful remand to the arbitrator, but the matter was sent back to the objecting court to determine statutory deposit compliance and proceed accordingly.

Ratio Decidendi: Section 34(4) of the Arbitration and Conciliation Act, 1996 authorises only a limited adjournment to enable the arbitral tribunal to remove grounds for setting aside the award, and does not empower a court to remand the matter after the award has been set aside.

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