A. Arbitration Act, 1940 (10 of 1940), Section 30, 33 – Arbitral award – Challenge to -- Award can be set aside only on the grounds specified in sub-clause (a) (b) and (c) of Section 30 of 1940 Act and on no other grounds -- Grounds such as inadequacy of reasons in support of an award, error committed by the arbitrator on facts, alternate or/and more plausible view could be taken then what is taken by the arbitrator, improper appreciation of evidence done by the arbitrator in recording any finding etc. are not the grounds on which any award much less a reasoned award can be set aside.

(Para 31, 32)

B. Arbitration Act, 1940 (10 of 1940), Section 30, 33 -- Arbitral award – Challenge to -- Appellate Court jurisdiction – High Court virtually sat as an appellate Court as if it was hearing the appeal arising out of the award and proceeded to probe into all factual issues arising in the case – High Court gone to the extent of permitting the State’s counsel to file some documents in appeal and then went on to examine the case on facts and eventually held that the arbitrator has travelled beyond clauses of the agreement and hence committed legal misconduct requiring the High Court to set aside the award – Held, such approach is wholly against the law.

(i)    In the first place, the High Court did not apply the law laid down by this Court while deciding the appeal and hence committed a jurisdictional error;

(ii)   Secondly, the High Court acted like an appellate Court and virtually treated as if the appeal arose directly against the award and then proceeded to examine all factual findings of the arbitrator by appreciating the evidence, it was not permissible in law;

(iii)  Thirdly, the High Court should have confined its inquiry to find out as to whether any legal misconduct was committed by the arbitrator and, if so, how and in what manner, it was, however, not done;

(iv)   Fourthly, the High Court went into the factual question by referring to clause of the agreement for holding that the arbitrator passed an award contrary to clause and thereby traveled beyond the terms of agreement which constituted a legal misconduct on his part -- In the absence of any finding recorded by the arbitrator and the Trial Court, such issue could not have been gone into for the first time in appeal by the High Court -- Being a question of fact, the same could not be examined in appeal.’

(v)    Fifthly, Clause 26 had nothing to do with the claims filed by the appellants -- Finding of the High Court that the award is rendered bad because it was passed in contravention of clause 26 of the agreement is, therefore, not legally sustainable in law;

(vi)   Sixthly, the High Court further failed to see that there was no error apparent on the face of the record in the findings recorded by the arbitrator;

(vii)  Seventhly, the High Court also failed to see that the Trial Court had elaborately gone into all the factual issues and rightly did not find any substance in the objections raised by the respondent; and

(viii) lastly, the award being a reasoned one, the reasoning of the arbitrator could not be said to be perverse to the extent that no man with ordinary prudence could take such view and nor any finding of the arbitrator was against any provision of law or in contravention of any of the clauses of the agreement so as to constitute a case of legal misconduct on the part of the arbitrator within the meaning of Section 30 of the Act for setting aside an award.

(Para 33-37)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 2(1)(e)(ii), 9, 37 – Letters Patent Appeal Rules, Clause 10 – Arbitration proceedings -- Interim order – L.P.A. – Maintainability of – An order passed by the learned Single Judge under Section 9 would be appealable under Section 37(1)(b) but not under clause 10 of the Letters Patent – LPA is not maintainable.

 (Para 2-7, 32-41)

B. Appeal – Remedy of – Interpretation of Statue -- Rules of interpretation of a statute would command that language of the statute be respected to be read as it is without injecting any other meaning to read non-existent words into it -- Appeal is creation of a statute and if not otherwise provided in the enactment, the remedy has to be treated to be an exclusion.

(Para 25-27)

C. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 1 – Object of the Act -- Interpretation of statute -- Arbitration and Conciliation Act, 1996 is a special statute enacted to keep pace with the UNCITRAL Model providing expeditious settlement -- Therefore, the objective of the Act also has to be kept in mind while placing an interpretation on its provisions.

(Para 28)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 -- Foreign arbitration award – Execution of -- Objection u/s 34 of Indian Arbitration Act -- Where the parties choose a juridical seat of Arbitration outside India and provide that the law which governs Arbitration will be a law other than Indian law, part I of the Indian Arbitration Act would not have any application and, therefore, the award debtor would not be entitled to challenge the award by raising objections u/s 34 before a Court in India -- Proceedings u/s 34, which occurs in Part I, are liable to be dismissed as untenable -- Judgment of the High Court enforcing the Foreign Award under Part II of the Arbitration Act is correct and liable to be upheld.

(Para 28-34)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11 – Appointment of Arbitrator – Discussion on merit - Jurisdiction of Court -- Jurisdiction of Court u/s 11 of the Act is limited and confine to examine as to whether there is an arbitration agreement between the contracting parties and, if so, whether any dispute has arisen between them out of such agreement which may call for appointment of arbitrator to decide such disputes -- A discussion much less with such elaboration on factual issues was wholly uncalled for and should not have been made -- Indeed, it was not necessary for the learned Single Judge to have recorded any finding on merits while making reference to the arbitrator u/s 11 of the Act.

(Para 12-14)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 33(4) – Review of award – Power of -- It is a trite law that a decree should be specific and well defined with sufficient precision to be executable since an award becomes a decree in arbitration law -- Section 33 (4) is a request jurisdiction to cure a material thing which has been left out or omitted by the Arbitrator in the award and the jurisdiction conferred by section 33 is to be exercised in the manner provided and is not plenary to the disputes referred to arbitration.

(Para 45)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 33(4) – Review of award – Power of -- Original award was reviewed by the Arbitrator which was improper exercise of jurisdiction -- Section 33(4) of the Act makes provisions for re-visiting the award by the Arbitrator if there is no agreement to the contrary, then an aggrieved party with notice to the opposite party may request, within 30 days from the receipt of the award to make an additional award as to claims presented in the arbitral proceedings but omitted from the award -- Arbitral tribunal would examine such a request under section 33 (5) of the Act and if it is found justified it may proceed to make an additional award within 60 days of such request -- Whereas the object of section 34 (4) is to eliminate the grounds for setting aside the arbitral award.

(Para 45)

C. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 33(4), 34(4) – Arbitration award -- Summary dismissal of appeal -- Review of -- Court do not think the ends of justice were served in summary dismissal of the appeals on grounds of delay, laches and limitation -- Due regard should have been had for an effective consideration of the issues involved after hearing counsel at length by noticing and deciding the issues raised by both the parties -- Hence the order/s, in the opinion of the court, on careful reconsideration deserves to be reviewed -- Cases stand remitted to the Arbitrator for eliminating the grounds of challenge as per mandate of section 34 (4) of the Act, 1996.

(Para 46,47)

Arbitration Act, 1940 (10 of 1940), Section 8 -- Arbitration and Conciliation Act, 1996 (26 of 1996), Section 15(2) -- Code of Civil Procedure Code, 1908 (V of 1908), Section 89 – Appointment of arbitrator – Substitute Arbitrator -- Section 89 of the CPC specifically provides that a Court hearing a suit may formulate terms of settlement between the parties and may either settle the same or refer the same for settlement by conciliation, judicial settlement, mediation or arbitration – Following the mandate of Section 89, the High Court disposed of the suit between the parties by recording the settlement between the parties in clauses 1 to 7 of the consent terms and by referring the remaining disputes to arbitration -- Therefore it is clear that it is the High Court that was the appointing authority which had in fact appointed arbitrator in terms of clause 8 of the consent terms – Lateron High Court correctly appointed another independent retired Judge as substitute arbitrator in terms of Section 15(2) of the Arbitration Act, 1996 -- Object of speedy resolution of disputes by arbitration would best be sub-served by a substitute arbitrator continuing at the point at which the earlier arbitrator has left off.

(Para 21,22)