Arbitral Award Can't Have Specific Format; Reasoning Must Be 'Proper', 'Intelligible' And 'Adequate' : Madras High Court

The court also held that any ground which was not raised in a petition under section 34 of the Arbitration and Conciliation Act, 1996 cannot be raised at the stage of appeal under Section 37 of the Act. The court further observed that reasoning of the award must be 'proper', 'intelligible' and 'adequate'.

Brief Facts

The Appellant filed the appeal challenging an order dated 26.4.2023 passed by a Single Judge rejecting the original petition filed by appellant under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the award dated 21.7.2021 passed by a Sole Arbitrator.

The Appellant raised two grounds of challenge to the award:

• that no personal hearing was granted by the Arbitrator, though it was sought for by appellant; and
• that all documents of appellant were not considered in the award.

Observations

On the first ground that no personal hearing was granted, the court noted that though in the petition filed under Section 34 of the said Act almost 31 grounds were raised, this was not one of the grounds. It held that a ground which was not raised before the Single Judge in the Section 34 petition cannot be raised at the stage of appeal under Section 37 of the 1996 Act.

As regards the non-consideration of all documents filed by appellant, the court found no perversity in the findings of the Judge. The court noted that the Arbitrator had considered 28 documents and decided the issues.

The court observed that:

“It is trite that an award cannot have any specific format. As every judge writes his/her judgment in a particular style, the learned Arbitrators also write in different styles.”

The court referred to the judgment of the Supreme Court in Dyna Technologies (P) Ltd v. Crompton Greaves Ltd., where it was held:

“There is no gainsaying that arbitration proceedings are not per se comparable to judicial proceedings before the Court.

…The mandate under Section 31(3) of the Arbitration Act is to have reasoning which is intelligible and adequate and, which can in appropriate cases be even implied by the courts from a fair reading of the award and documents referred to thereunder, if the need be. The aforesaid provision does not require an elaborate judgment to be passed by the arbitrators having regard to the speedy resolution of dispute.

….When we consider the requirement of a reasoned order, three characteristics of a reasoned order can be fathomed. They are: proper, intelligible and adequate….Even if the Court comes to a conclusion that there were gaps in the reasoning for the conclusions reached by the Tribunal, the Court needs to have regard to the documents submitted by the parties and the contentions raised before the Tribunal so that awards with inadequate reasons are not set aside in casual and cavalier manner….”

The court observed that the reasoning given in the award was proper, intelligible and adequate, and the Arbitrator had considered the documents submitted by appeallant and applied his mind to the contents thereof.

The court dismissed the appeal.

Case Title: Gopal Krishan Rathi vs. Dr. R. Palani

Citation: 2025 LiveLaw (Mad) 51

Case Number: O.S.A.(CAD) No.141 of 2023

Date of Judgment: 20.01.2025

Click Here to Read/Download The Order