Admitted set-off can sustain an interim arbitral award, even where a counter-claim is pending for final adjustment.

An admitted set-off disclosed in insolvency proceedings was treated as a categorical admission of liability, sufficient to support an interim award under Section 31(6) of the Arbitration and Conciliation Act, 1996. The existence of a counter-claim did not erase that admission or make the interim award illegal, because the admitted amount could still be adjusted at final adjudication. Judicial review under Sections 34 and 37 remained narrow, and the dismissal of the Section 34 objections was held to require no interference.

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Issues: Whether the interim award based on the appellant's admitted set-off in the insolvency form could be sustained, and whether the dismissal of the Section 34 objections required interference in appeal.

Analysis: The challenge was tested within the narrow confines of judicial review under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996. The admitted set-off disclosed by the appellant in the insolvency proceedings was treated as a categorical admission of liability, not requiring further adjudication for the limited purpose of an interim award. The existence of a counter-claim did not erase the character of the admission, and an interim award was held permissible under Section 31(6) on the basis of an admitted amount. The Court also held that the filing of the counter-claim did not render the earlier interim award illegal, since the amount could still be adjusted at final adjudication.

Conclusion: The interim award was upheld and the appeal was dismissed. The Section 34 dismissal was found to call for no interference.

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