Most Section 34 petitions are fought to a finish. A small but useful class of them ends differently: the parties themselves accept that the award, or a severable part of it, should go, and ask the court to clear the way for a fresh adjudication. Director of Civil Aviation & Anr. v. Dwarika Project, O.M.P. (COMM) 486/2022, decided by Justice Om Prakash Shukla on 28 September 2026, is a clean example — the award dated 28 April 2022, which had partly allowed Claim No. 1 in the contractor's favour, was set aside by consent, and the Court simultaneously constituted the new tribunal so that the claim did not fall into a procedural void.
The case in brief
The Director of Civil Aviation challenged, under Section 34 of the Arbitration and Conciliation Act, 1996, an arbitral award dated 28 April 2022 which had partly allowed Claim No. 1 in favour of the respondent contractor. When the petition reached hearing before Justice Om Prakash Shukla, the contest had narrowed to a shared position: both parties agreed that the award could be set aside and the claim sent back for fresh adjudication. The Court recorded the consent, set the award aside, and — rather than leaving the parties to begin appointment proceedings from scratch — appointed a sole arbitrator in the same order.
What the order provided
| Direction | Detail |
|---|---|
| Award | Set aside by consent of the parties |
| Fresh tribunal | A sole arbitrator appointed by the Court to decide Claim No. 1 afresh |
| Timelines | Reference to be entered upon within three weeks; Section 12(2) disclosures within three weeks thereafter |
| Institutional framework | Arbitration under the rules of the Delhi International Arbitration Centre; fees per the DIAC Schedule of Fees |
| Merits | All pleas kept open; the Court's observations confined to the disposal of the petition |
| Registry | Directed to communicate the order to the arbitrator, including by email |
Why parties choose this route
A Section 34 challenge fought to judgment carries risk on both sides: the award-holder may lose everything if the court finds patent illegality, and the challenger may face execution with accumulated interest if the challenge fails. Where a defect in the award is tolerably clear to both camps — a misreading of the contract, a gap in reasons, an issue decided without evidence — consenting to a set-aside with an immediate fresh reference converts years of uncertain litigation into a bounded second arbitration. For public bodies, it also avoids a reasoned judicial finding of illegality against the award they obtained or resisted.
Contested Section 34
Limited grounds, no re-appreciation of evidence, outcome binary — the award survives or falls. Appeals under Section 37 can add years. The court cannot modify the award or substitute its own view on merits.
Consent disposal
The award goes by agreement; the claim returns to a tribunal both sides accept; timelines, institution and fees are fixed in the same order; every merits plea survives for the new arbitrator.
The institutional details are not boilerplate
Three features of the order repay attention. The direction to make Section 12(2) disclosures within a fixed window ensures the new tribunal's independence is tested at the threshold, not discovered mid-reference. Anchoring the arbitration to the DIAC rules gives the fresh proceeding a procedural spine — timelines, fee certainty under the DIAC schedule, and administrative support — which is particularly valuable where the first arbitration has already consumed years. And the express statement that observations in the judgment will not influence the arbitrator protects the fresh adjudication from being colonised by remarks made in a consent context.
For parties weighing a consent set-aside: confirm what exactly is being set aside (the whole award or a severable part); insist that the order record that all pleas remain open; fix the appointment, disclosure timelines and fee framework in the same order; and consider limitation — a claim restored to arbitration should move immediately, not rest on the order.
The larger point
Section 34 is usually described in terms of its narrow grounds. This disposal is a reminder that the provision also operates inside a party-driven system: where both sides accept that an award cannot stand, the court's role is to give that agreement an orderly legal effect — ending the flawed award, constituting the new tribunal, and keeping the merits untouched. This article is for general information only and is not legal advice.
Frequently Asked Questions
Can a court set aside an arbitral award simply because the parties agree?
Where both sides before a Section 34 court accept that the award should not stand, the court can record that consent and set the award aside, as happened here. The consent resolves the challenge; it does not decide the underlying dispute, which is why the Court immediately provided for the claim to be arbitrated afresh with all pleas kept open.
Who appointed the new arbitrator and under what framework?
The High Court itself appointed an advocate as sole arbitrator to decide Claim No. 1 afresh. The arbitrator was directed to enter upon the reference within three weeks, make the disclosures required by Section 12(2) of the Arbitration and Conciliation Act, 1996 within three weeks of doing so, and conduct the arbitration under the rules of the Delhi International Arbitration Centre, with fees as per the DIAC schedule.
Do the court's observations bind the new arbitrator?
No. The judgment expressly records that the Court's observations were made only for deciding the petition and that the arbitrator must decide the disputes independently on their merits. All contentions of both parties remain open before the new tribunal.
Is a consent set-aside the same as settling the dispute?
No. A settlement extinguishes the claim; a consent set-aside only removes a flawed award. The claim itself survives and returns to arbitration. Parties choose this route where both accept that the award suffers from a defect — but each still believes it can win the claim on merits.