1 ARBP363.08.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO. 363 OF 2008
M/s. R.R. Hi-Tech Engineering Pvt. Ltd. ... Petitioner Vs
1. Union of India & ors. ... Respondents Ms. Shilpa Kapil for the Petitioner.
Mr. Suresh Kumar for the Respondents.
CORAM : S.J. VAZIFDAR, J.
DATED : 15TH SEPTEMBER , 2010.
ORAL ORDER. :
1. This petition purports to be under section 31(2) of the Arbitration and Conciliation Act, 1996. The Petitioner seeks an order directing Respondent Nos.3 and 4 to make and publish an award at the earliest. In the alternative, the Petitioner seeks an order appointing a retired Judge of this court as an arbitrator.
2. The question that arises for consideration is whether an award 2 ARBP363.08.sxw can be made by a majority of the arbitral tribunal, without the participation of the other members thereof on account of their death or otherwise. I have answered the question in the negative.
3. It is not necessary to refer to the merits of the case or even to the nature of the disputes between the parties. Suffice it to state that an agreement was entered into between the Petitioner and Respondent No.1, which admittedly contained a clause incorporating an arbitration agreement. The disputes and differences which arose between the Petitioner and the Respondent No.1 were referred to an arbitral tribunal consisting of three learned arbitrators viz. Respondent Nos.3 and 4 and one P.S. Tendulkar. The arbitral tribunal was constituted in the year 2003. Unfortunately, the said P.S. Tendulkar expired in the year 2007. Admittedly, an award had not been made by the arbitral tribunal.
4. The learned counsel appearing on behalf of the Petitioner submits that Respondent Nos.3 and 4 who constituted a majority of the arbitral tribunal are bound to make an award in accordance with section 31(2) of the said Act. Section 31 reads as under : 3 ARBP363.08.sxw "31. Form and contents of arbitral award.- (1) An arbitral award shall be made in writing and shall be signed by the members of the arbitral tribunal. (2) For the purposes of sub-section (1), in arbitral proceedings with more than one arbitrator, the signatures of the majority of all the members of the arbitral tribunal shall be sufficient so long as the reason for any omitted signature is stated.
(3) The arbitral award shall state the reasons upon which it is based, unless
(a) the parties have agreed that no reasons are to be given, or
(b) the award is an arbitral award on agreed terms under section 30.
(4) The arbitral award shall states its date and the place of arbitration as determined in accordance with section 20 and the award shall be deemed to have been made at that place.
(5) After the arbitral award is made, a signed copy shall be delivered to each party.
(6) The arbitral tribunal may, at any time during the arbitral proceedings, make an interim arbitral award on any matter with respect to which it may make a final arbitral award.
(7) (a) Unless otherwise agreed by the parties, where and insofar as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which th award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part or the period between the date on which the cause of action arose and the date on which the award is made.
4 ARBP363.08.sxw (b) A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of eighteen per cent per annum from the date of the award to the date of payment.
(8) Unless otherwise agreed by the parties, - (a) the costs of an arbitration shall be fixed by the arbitral tribunal.
(b) the arbitral tribunal shall specify - (i) the party entitled to costs,
(ii) the party who shall pay the costs,
(iii) the amount of costs of method of
determining the amount, and
(iv) the manner in which the costs shall be paid,
Explanation. - For the purpose of clause (a), "costs" means reasonable costs relating to -
(i) the fees and expenses of the arbitrators and witnesses,
(ii) legal fees and expenses;
(iii) any administration fees of the institution supervising the arbitration, and
(iv) any other expenses incurred in connection with the arbitral proceedings and the arbitral award."
5. Section 31(2) only provides that for a valid award, the signatures of a majority of the members of the arbitral tribunal shall be sufficient so long as the reason for any omitted signature is stated. Section 31(2) does not dispense with the requirement of all the members of the arbitral tribunal being a party to and participating in 5 ARBP363.08.sxw the making of the award. The arbitrators may differ. However, it is necessary that they all participate in the making of the award. Until and unless the award is made and published, each member of the arbitral tribunal is entitled to take any view in the matter. An award cannot be made or even be said to be finalised unless all the members of the arbitral tribunal are parties thereto. The only formality dispensed with by section 31(2) is the requirement of the signature of the minority members of the arbitral tribunal being appended to the award. However, the participation of the members of the arbitral tribunal whose signature is not appended to the award in the making of the award is mandatory.
6. The words in section 31(3) "so long as the reason for any omitted signature is stated" do not include an omission on account of any arbitrator refusing or being unable to act. They apply to the inability of the arbitrator to append his signature on account of difficulty or inconvenience or in view of certain contingencies despite his having participated in the making of the award.
7. In the circumstances, the application for an order directing 6 ARBP363.08.sxw Respondent Nos.3 and 4 to make and publish the award is rejected.
8. Mr. Suresh Kumar, the learned counsel appearing on behalf of Respondent No.1 states that a fresh arbitral tribunal has, in fact, been constituted consisting of Respondent Nos.3, 4 and 5. The Respondent No.1 is entitled to do so under the arbitration agreement. The arbitration proceedings would continue from the stage at which it had stopped before the earlier arbitral tribunal. Whether parties should be allowed to file further documents or pleadings is left for the decision of the arbitral tribunal.
9. The petition is, therefore, dismissed. There shall be no order as to costs.