An arbitral award passed without hearing a party violates natural justice and warrants annulment.

The petitioner sought enhancement of compensation for land and structures acquired under the National Highways Act, 1956, through a petition under Section 3G(5).

During the arbitration, he applied to amend his claims.

The record contained only the last page of that application and its affidavit; notices showed that the application had been received and that responses were sought.

The Arbitrator’s award partly rejected claims raised in the amendment application, but the record contained no minutes of proceedings and the petitioner was not afforded an opportunity to be heard before the award was made.

The petitioner challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996.

Whether the arbitral award was liable to be set aside under Section 34 because it was made without affording the petitioner an opportunity to be heard on his claims, including those raised in the amendment application.

Whether the failure to provide that opportunity amounted to a violation of the principles of natural justice and the fundamental policy of Indian law.

Section 34 of the Arbitration and Conciliation Act, 1996 permits a court to set aside an arbitral award on specified grounds, including where the award conflicts with the public policy of India; the court’s review must remain within the limits prescribed by Explanation 2 to Section 34(2)(b)(ii).

The Court relied on OPG Power Generation (P) Ltd. v. Enexio Power Cooling Solutions (India) (P) Ltd., (2025) 2 SCC 417, which identifies violation of natural justice as an instance of contravention of the fundamental policy of Indian law, subject to those limits on judicial scrutiny.

The Arbitrator received the amendment application, issued notices concerning it, and rejected part of the claims raised in it, but the record disclosed no minutes of proceedings or hearing at which the petitioner could address those claims.

The Court therefore found that the award had been made without affording the petitioner an opportunity to be heard. Applying the natural-justice principle recognised in OPG Power Generation, it held that this procedural violation warranted setting aside the award, without re-examining the merits of the compensation claims.

It remitted the matter to the Arbitrator for fresh determination after affording all contesting parties a proper opportunity of hearing. The Court expressly left the merits of the parties’ claims undecided and requested that the proceedings be concluded within the time prescribed by law.