PETITIONER:
SUBHASH AGGARWAL AGENCIES
Vs.
RESPONDENT:
BHILWARA SYNTHETICS AND OTHERS
DATE OF JUDGMENT13/12/1994
BENCH:
MOHAN, S. (J)
AHMADI A.M. (CJ)
MANOHAR SUJATA V. (J)
CITATION:
1995 AIR 947 1995 SCC (1) 371
JT 1995 (1) 392 1994 SCALE (5)228
ACT
HEADNOTE
JUDGMENT
The Judgment of the Court was delivered by MOHAN, J.- The facts in brief leading to this civil appeal are as follows. 2. The appellant is a member of the Delhi Hindustani Mercantile Association. By a claim petition dated 11-8- 1979, the appellant had claimed a sum of Rs 4,51,246.50 under various heads of accounts including commission from the first respondent up to the period of 30-6-1979. The claim related to transactions which took place between appellant and first respondent. In turn, the first respondent was also a member of Delhi Hindustani Mercantile Association. It also made a counter-claim against the appellant. As per the rules of the association, the dispute was referred to an Arbitrator. 3. By an order dated 20-11-198 1, the learned Single Judge of Delhi High Court directed in terms of the concession made on behalf of the Association and the sole Arbitrator, a reasoned award shall be passed by the Arbitrator. 4. The sole Arbitrator (Mohan Lal) entered upon the reference. On 19-7-1983, by a reasoned award, he awarded a sum of Rs 1,97,891.81 in favour of the appellant against the first respondent. This amount was also to carry interest @ 18% per annum from the date of the award till the date of payment. Aggrieved by this award the first respondent preferred an appeal as per Rule 37 Regulation 7 of Delhi Hindustani Mercantile Association Rules and Regulations (hereinafter referred to as ’the Rules’). The appeal was heard by the Tribunal. By an order dated 24-2-1984, the Tribunal confirmed the award of the Arbitrator without assigning any reasons. 373 5.Against this order, the appellant preferred Suit No. 498- A/84 for making the award a rule of the court. The first respondent filed objections against the Award. Inter alia, it was urged by it that the award was not a reasoned award. A learned Single Judge of the High Court of Delhi by an order dated 5-4-1990 allowed the objections and set aside the award of the Appellate Tribunal and remitted the award to Tribunal for reconsideration and for giving reasons for the Award within four months from the date of the judgment. 6. Assailing the correctness of this judgment, the appellant preferred Appeal FAO(OS) 113/90 before the High Court. The said appeal was dismissed in limine by the impugned order dated 17-7-1990. 7. The learned counsel for the appellant would argue that insofar as the award dated 19-7-1983 is concerned it is a reasoned award. That is enough compliance with law. Generally speaking, when the Appellate Tribunal merely confirms that reasoned award, it is not necessary again to give reasons. Therefore, the High Court erred in setting aside the order of the Appellate Tribunal on the ground that no reasons were given in that order. The principle of merger did not apply to the present proceedings where the parties had consented to a reasoned award by the sole Arbitrator. In any event, the High Court erred in requiring reasons to be given even at the appellate stage overlooking the fact that the Award dated 19-7-1983 is a reasoned award. 8. In opposition to this, the learned counsel for the respondent would urge that in law as laid down in Commercial Arbitration by Mustill and Boyd, 2nd Edn. at pp. 364-65 when the Appellate Tribunal has made an award either confirming or reversing the original award, it is the award of the Tribunal which defines the rights of the parties. 9. The appellate award once made completely replaces the original award. Therefore, a party is entitled to know the reasons as to why the appellate authority has come to such a conclusion. Once the award of the sole Arbitrator was subject to an appeal, the award of the appellate authority supersedes the original award and it is only that award which exists in law. Such an award must contain reasons for its decision. This Court in Indian Oil Corpn. Ltd. v. Indian Carbon Ltd.1 has stressed the requirement of the Arbitrator to give reasons in the Award. 10. The first respondent filed OMP No. 37 of 1980 before the High Court of Delhi. That was a petition under Sections 5 and 12(2) of Arbitration Act, 1940. The prayer was that the authority granted in favour of Delhi Hindustani Mercantile Association and the Arbitrator (Mohan Lal) be revoked; a sole arbitrator be appointed in their places and that a direction may be issued that the arbitration agreement shall cease to have any effect. By order dated 20-11-1981, the said petition was dismissed with the following directions: 1 (1988) 3 SCC 36: (1988) 3 SCR 426 374
"In the circumstances, I would, therefore,
dismiss the petition subject, however to the
direction to the Arbitrator, in terms of the
concession made on behalf of the Association
and the Arbitrator, that the Arbitrator would
hear the matter after giving reasonabl e
opportunity to the petitioner of being heard,
and to make a reasoned award on the conclusion
of the proceedings. The petitioner would be
at liberty to raise before the Arbitrator, as
indeed in any proceedings, subsequent to the
award any question of law or fact,
irrespective of whether they have been raised
and/or dealt with in the present proceedings,
including the question as to the effect of the
petitioner’s resignation on the arbitration
agreement and the arbitration proceedings."
(emphasis supplied) Consequent to this direction, the matter was taken up by the sole Arbitrator and by his reasoned Award dated 19-7-1983, he ultimately held as under:
"Thus, for the above reasons, I do hereby
award a sum of Rs 1,97,891.81 (Rupees one lakh
ninety-seven thousand eight hundred and
ninety-one and paise eighty-one only) against
Respondent 1 (M/s Bhilwara Synthetic Limited,
who are the principal respondents in this
case, as agreed by themselves also) in favour
of the claimant (M/s Subhash Aggarwal
Agencies). I further give my award. that
respondent is liable to pay interest at 18%
p.a. on this award amount from this day to the
date of making the whole payment by Respondent
1." 11. This Award fully conforms to the order dated 20-11-1981 of the High Court made on concession between the parties. Aggrieved by the same, as per Regulation 7 of Rule 37 of the Rules, the matter was taken up in appeal to the Tribunal by the first respondent. It may be relevant at this stage to quote Regulations 7 and 10 of Rule 37 of the Rules. The said Regulations read as under:
"7. If any of the parties is not agreed with
the decision of the Arbitrator, the party may
file the appeal against the decision within 30
days from the date of decision. The cost of
the appeal’s documents will be Rs 20.
Note : The holiday will not be counted for the
period of expiry of aforesaid time-limit.
10. If any of the parties files the appeal
against the decision of the Arbitrator, the
appeal will be heard by the Tribunal
consisting of three members and its decision
will be final."
12. On 24-2-1984, the Tribunal dismissed the
appeal of the respondent and confirmed the
award of the sole Arbitrator. That order
reads as under:
"We have heard the arguments for both the
parties and also taken into consideration
their objections raised by them. The appeal
of the appellant is dismissed and the award of
the Arbitrator, Shri Mohan Lal dated 19-7-198 3
is hereby upheld. Parties to bear their own
costs. Order be pronounced." This was set aside by the learned Single Judge by his order dated 5-4-1990 on the ground that as the award given by the Tribunal is bereft of reasons, it 375 cannot be made a rule of the court. In his opinion the award given by the Tribunal is the final award and this award is to be made a rule of the court. No reasons had been given at all. Only the conclusion has been stated. The award does not indicate as to how the Tribunal have arrived at the conclusion. The award of the Appellate Tribunal is directly in conflict with the direction given by this Court by order dated 20-11-1981 which specifically provided that the Arbitrator should make a reasoned award. No reasons whatsoever have been assigned. This is the final award. It should have contained the reasons. Thus, it cannot be legally sustained and has to be set aside. The order of the learned Single Judge was confirmed in FAO(OS) 113/90 when the Division Bench dismissed the same laconically saying: "Dismissed." 13. On a perusal of the award dated 19-7-1983 of the sole Arbitrator, it cannot be disputed that it contained reasons as to why an award of Rs 1,97,891.81 was made in favour of the appellant. Therefore, that is fully in conformity with the direction given by the High Court on 20-11-1981. Now, the High Court holds that the appellate order of the Tribunal dated 19-7-1983 must also give reasons. This finding is arrived at on two grounds:
(i) The award of the Tribunal is the final
award which has to’ be made a rule of court;
(ii) The failure to give reasons runs counter
to the directions of the High Court dated 20-
11-1981.
14. We can shortly dispose of the second
ground before we take up the first. The
direction dated 20-11-1981 does not envelop
the appellate authority. Before we proceed
further, we will consider the relevant law on
this aspect. That the Arbitrator should give
reasons, is beyond dispute.
15. Russell in Law of Arbitration (20th
Edn.) at p. 291 says:
"In order that an appeal (if it takes place)
may be effective, the Court has power to
order an arbitrator or umpire to give reasons
for his decision in sufficient detail to
enable the Court to consider any question of
law arising out of the award. Where the
arbitrator or umpire gives no reason for
making the award, the Court must not make an
order unless it is satisfied either that
before the award was made, one of the parties
gave notice to the arbitrator or umpire that a
reasoned award would be required; or that
there was some special reason why such notice
was not given, or unless all the parties to
the arbitration consent to the order being
made. ... All that is necessary under the Act
of 1979 is that the arbitrators should give a
’reasoned award’, i.e., the arbitrators should
set out what, in their view of the evidence,
did or did not happen, and should explain
succinctly why in the light of what happened
they had reached their decision and what that
decision was. They are not expected to
analyse the law and the authorities."
Again at p. 335 it is stated:
376
"An arbitrator does not normally have to state
his reasons in his award, but, of course, may
be ordered by the Court to do so, or to
amplify those already given.". 16.An illuminating passage is found in Arbitration Law by Robert Merkin, 1991 Edn. It is stated in the following paragraphs as under: "19.17 : English arbitration law does not impose any general duty upon arbitrators to give reasons for their award, although the parties are of course free to agree that the award should contain reasons. The provision of a reasoned award is nevertheless of great significance under English law as, presented with a reasoned award, it becomes possible for the High Court to determine whether the arbitrators have made any error of law in reaching their conclusions. In order to ensure that the possibility of an appeal on point of law is not defeated by the failure of the arbitrators to provide a reasoned award, the 1979 Act provides a mechanism whereby sufficient reasons may be obtained to facilitate judicial review: if reasons are not available, the High Court has no jurisdiction to hear any appeal based on error of law. 19.23 : It would seem that where arbitrators do determine to give reasons for their award, or are ordered to do so by the. High Court or the parties themselves, no great obligation is involved; this is by way of contrast to the old special case procedure. The often repeated guidelines were laid down by Donaldson, L.J. in Bermer Handelsgesellschaft mbH v. Westzucker GmbH (No. 2)2:
It is of the greatest importance that trade
arbitrators working under the 1979 Act should
realise that their whole approach should now
be different. At the end of the hearing they
will be in a position to give a decision and
the reasons for that decision. They should do
so at the earliest possible moment.... No
particular form of award is required.... All
that is necessary is that the arbitrators
should set out what on their view of evidence,
did or did not happen, and should explai n
succinctly why in the light of what happened,
they have reached their decision and what that
decision is.... Where a 1979 Act award differs
from a judgment is in the fact that the
arbitrators will not be expected to analyse
the law and the authorities. It will be quite
sufficient that they should explain how they
reached their conclusion.... The point which I
am seeking to make is that a reasoned award,
in accordance with the 1979 Act, is wholly
different from an award in the form of a
special case. It is not technical, it is not
difficult to draw and above all it is
something which can and should be produced
promptly and quickly at the conclusion of the
hearing.
The courts have, consistently with this
passage, stressed that awards are not legal
judgments and thus must not be viewed in a
pedantic or overcritical fashion. Equally,
the fact that an award is
2 (1981) 2 Lloyd’s Rep 130, 132
377 short does not mean that it is inadequately reasoned. In particular it is not necessary for arbitrators to set out lists of rival submissions or factual propositions and to choose between them. It is enough that the award demonstrates why the arbitrators have found for one party rather than the other. Situations in which reasons may be ordered 19.24 : The operation of Section 1(5)-(6) of the Arbitration Act, 1979 is most easily explained by separate consideration of each of the situations in which it may be required. These are as follows:
(a) The parties have agreed that a reasoned
award is required, or have otherwise asked the
arbitrators for a reasoned award.
(b) The parties have agreed that no reasons
are to be given, or have otherwise asked the
arbitrators not to include reasons in their
award.
(c) There is no agreement as to reasons, but
neither party has asked for reasons.
(d)There is no agreement as to reasons, and
one party has requested a reasoned award.
(e) There is no agreement as to reasons, and
one party has requested an award not
containing reasons." 17. The Indian Law is stated by N.D. Basu on Arbitration (8th Edn.) at para 2228 at pages 835-836. It reads:
"2228. Whether arbitrators should give
reasons for decisions.- An award of
arbitrators is not a reasoned judicial
decision and the arbitrators need not give
reasons for their decisions, and even ignore
any proposition advanced by the parties. The
court in filing an award wherein the
arbitrators have failed to give a decision on
any matter, the subject of dispute cannot be
deemed to have exercised a jurisdiction not
vested in it by law or to have failed to
exercise a jurisdiction vested in it by law.
An arbitrator is not bound by the technical
rules of procedure which the court must
follow, nor need he record separate findings
on the various points on which the parties are
at issue or write a reasoned judicial
decision. All that he is required to do is to
give an intelligible decision which determines
the rights of the parties in relation to the
subject-matter of the reference. While it is
not necessary for an arbitrator to give
reasons for his own conclusions or to give
separate finding on each and every issue
involved in the dispute, every party that
appoints an arbitrator has right to expect an
intelligible decision which determines the
rights of the parties in the various important
points which are at issue. Mere omission to
give reasons does not vitiate the award. It
is not open to the court to speculate where no
reasons have been given by the arbitrator as
to what impelled him to arrive at a conclusion
and to determine whether the conclusion was
right or not." (emphasis supplied)
378 18. A few rulings of this Court may now be seen. In Bungo Steel Furniture (P) Ltd. v. Union of India3 this Court observed thus:
"It is now a well-settled principle that if an
arbitrator,in deciding a dispute before him,
does not record his reasons and does
not indicate the principles of law on which he
has proceeded, the award is not on that
account vitiated. It is only when the
arbitrator proceeds to give his reasons or to
lay down principles on which he has arrived at
his decisions that the Court is competent to
examine whether he has proceeded contrary to
law and is entitled to interfere if such error
in law is apparent on the face of the award
itself." (emphasis supplied) 19. Again, in Firm Madanlal Roshanlal Mahajan v. Hukumchand Mills Ltd.4 it is stated:
"In the present case, the arbitrator gave no
reason for the award. We do not find in the
award any legal proposition which is the basis
of the award, far less a legal proposition
which is erroneous. It is not possible to say
from the award that the arbitrator was under a
misconception of law. The contention that
there are errors of law on the face of the
award is rejected."
(emphasis supplied) 20. A reference may be made to the decision of Indian Oil Corpn. 1 it is held as under:
"In India, there has been a trend that reasons
should be stated in the award. The reasons
that are set out must be reasons which will
not only be intelligible but also deal with
the substantial points that have been raised.
When the arbitration clause required the
arbitrator to give a reasoned award, the
sufficiency of the reasons depend upon the
facts of the particular case. He is not bound
to give detailed reasons.
The Court does not sit in appeal over the
award and review the reasons. The Court can
set aside the award only if it is apparent
from the award that there is no evidence to
support the conclusions or if the award is
based upon any legal proposition which is
erroneous.
The reasons that are set out must be reasons
which will not only be intelligible but also
deal with the substantial points that have
been raised. When the arbitration clause
required the Arbitrator to give a reasoned
award and the Arbitrator does give his reasons
in the award, the sufficiency of the reasons
depend upon the facts of the particular case.
He is not bound to give detailed reasons. The
Court does not sit in appeal over the award
and review the reasons. The Court can set
aside the award only if it is apparent from
the award that there is no evidence to support
the conclusions or if the award is based upon
any legal proposition which is erroneous."
(emphasis supplied) 21. In Raipur Development Authority v. Chokhamal ContractorS5 a five Judge Bench of this Court discussed the entire law on this aspect elaborately. 3 AIR 1967 SC 378: (1967) 1 SCR 633 4 AIR 1967 SC 1030: (1967) 1 SCR 105 5 (1989) 2 SCC 721 : AIR 1990 SC 1426 379 Therefore, it is enough that we refer to this ruling. It is stated in following paragraphs as under: (SCC pp. 725-75 1)
"3. A brief history of the English Law of
Arbitration, is given in the learned treatise The Law and Practice of Commercial
Arbitration in England by Sir Michael, J .
Mustill and Stewart C. Boyd. For centuries
commercial men preferred to use arbitration
rather than the courts to resolve their
business disputes on account of the inherent
advantages in the settlement of disputes by
arbitration. They preferred this alternative
method of settlement of disputes to the
ordinary method of settlement through courts
because arbitration proceedings were found to
be cheap and quick. It was no doubt true that
the courts repeatedly expressed doubts as to
the wisdom of this preference as reflected by
the current opinion that arbitration was an
ineffective procedure, not that it was
undesirable in itself. The commercial
community, has been however, insisting on the
right to arbitration and has always exhibited
an interest in seeing that the system is made
to work as well as possible. This led to
repeated statutory intervention. Accordingly
laws were passed from time to time to make the
arbitration proceedings effective. The
English Arbitration Act of 1950 and the
English Arbitration Act, 1979 are the two
major pieces of legislation which now control
the arbitration proceedings in England. The
legal requirements of an award under English
Law are succinctly given in the ’Hand Book of
Arbitration Practice’ by Ronald Bernstein (1
987). English Law does not impose any legal
requirement as to the form of valid award but
if the arbitration agreement contains any
requirement to the form of the award the award
should meet those requirements. The award
must be certain. It could be either interim
or final. An award without reasons is valid.
’The absence of reasons does not invalidate an
award. In many arbitrations the parties want
a speedy decision from a tribunal whose
standing and integrity they respect, and they
are content to have an answer Yes or No; or a
figure of X. Such an award is wholly
effective; indeed, in that it cannot be
appealed as being wrong in law it may be said
to be more effective than a reasoned award.’
4. Section 1 of the English Arbitration
Act, 1979, however, provides that if it
appears to the High Court that an award does
not or does not sufficiently set out the
reasons for the award in sufficient detail to
enable the court to consider any question of
law arising out of it, the court has power to
order the arbitrator or umpire to give reasons
or further reasons.
5. In the United States of America as a
general rule an arbitration award must contain
the actual decision which results from an
arbitrator’s consideration of the matter
submitted to them but the arbitrator need not
write opinion with any specificity as a court
of law does unless otherwise provided by a
statute or by the submission itself.
Arbitrators are not required to state in the
award each matter considered or to set out
380
the evidence or to record findings of facts or
conclusions of law. They need not give
reasons for their award and conclusions or the
grounds which form the basis for the
arbitration determination, describe the
process by which they arrived at their
decision or the rationale of the award.
Although such matters are not required, the
award is not necessarily invalidated because
it sets out the reasons or the specific
findings, matters, or conclusions on which it
is based and faulty reasoning if disclosed
does not by itself vitiate the award. (See
Corpus Juris Secundum, Vol. VI, pp. 324-325)
6. In Australia too an arbitrator, unless
required under Section 19 of the Australian
Arbitration Act, 1902 to state in a special
case a question of law is under no obligation
in law to give his reasons for his decision
(vide University of New South Wales v. Max
Cooper & Sons P Ltd.6).
21. Thus it is seen that the Law Commission
did not recommend the inclusion of a provision
in the Act requiring the arbitrator or umpire
to give reasons for the award.
22. It is not disputed that in India it had
been firmly established till the year 1976
that it was not obligatory on the part of the
arbitrator or the umpire to give reasons in
support of the award when neither in the
arbitration agreement nor in the deed of
submission it was required that reasons had to
be given for the award (vide Firm Madanlal
Roshanlal Mahajan v. Hukumchand Mills Ltd.4,
Bungo Steel Furniture (P) Ltd. v. Union of
India3 and N. Chellappan v. Secy., Kerala
State Electricity Board7. It is, however,
urged by Shri Fali S. Nariman who argued in
support of the contention that in the absence
of the reasons for the award, the award is
either liable to be remitted or set aside,
that subsequent to 1976 there has been a
qualitative change in the law of arbitration
and that it has now become necessary to insist
upon the arbitrator or the umpire to give
reasons in support of the award passed by them
unless the parties to the dispute have agreed
that no reasons need be given by the
arbitrator or the umpire for his decision.
Two main submissions are made in support of
the above contention. The first submission is
that an arbitrator or an umpire discharges a
judicial function while functioning as an
arbitrator or an umpire under the Act, and,
therefore, is under an obligation to observe
rules of natural justice while discharging his
duties, as observed by this Court in Payyavula
Vengamma v. Payyavula Kesanna8. This Cour t
relied in that decision upon the observations
made by Lord Langdale, M.R. in Harvey v.
Shelton9 at page 462 which read thus:
6 35 Aus LR 219
7 (1975) 1 SCC 289 : AIR 1975 SC 230
8 AIR 1953 SC 21 : (1953) 1 MLJ 97
9 (1844) 7 Beav 455 : 49 ER 1141
381
‘It is so ordinary a principle in the
administration of justice, that no party to a
cause can be allowed to use any means
whatsoever to influence the mind of the Judge,
which means are not known to and capable of
being met and resisted by the other party,
that it is impossible, for a moment, not to
see, that this was an extremely indiscreet
mode of proceeding, to say the very least of
it. It is contrary to every principle to
allow of such a thing, and I wholly deny the
difference which is alleged to exist between
mercantile arbitrations and legal
arbitrations. The first principle of justice
must be equally applied in every case. Except
in the few cases where exceptions are
unavoidable, both sides must be heard, and
each in the presence of the other. In every
case in which matters are litigated, you must
attend to the representations made on both
sides, and you must not, in the administration
of justice, in whatever form, whether in the
regularly constituted courts or in
arbitrations, whether before lawyers or
merchants, permit one side to use means of
influencing the conduct and the decisions of
the Judge, which means are not known to the
other side.’ (emphasis supplied) 23. This Court also relied on the decision in Haigh v. Haigh10, which required an arbitrator to act fairly in the course of its duties. The two well recognised principles of natural justice are (i) that a Judge or an arbitrator who is entrusted with the duty to decide a dispute should be disinterested and unbiased (nemo judex in causa sua); and (ii) that the parties to dispute should be given adequate notice and opportunity to be heard by the authority (audi alteram partem) (see Administrative Law by H.WR. Wade, Part V and Judicial Review of Administrative Action by S.A. de Smith, Third Edition, Chapter 4). Giving reasons in support of a decision was not considered to be a rule of natural justice either under the law of arbitration or under administrative law. 33. The people in India as in other parts of the world such as England, U.S.A. and Australia have become accustomed to the system of settlement of disputes by private arbitration and have accepted awards made against them as binding even though no reasons have been given in support of the awards for a long time. They have attached more importance to the element of finality of the awards than their legality. Of course when reasons are given in support of the awards and those reasons disclose any error apparent on the face of the record people have not refrained from questioning such awards before the courts. It is not as if that people are without any remedy at all in cases where they find that it is in their interest to require the arbitrator to give reasons for the award. In cases where reasons are required, it is open to the parties to the dispute to introduce a term either in the arbitration agreement or in the deed of submission requiring the arbitrators to give reasons in support of 10 (1861) 31 LJ Ch 420: 3 De GF&J 157 382 the awards. When the parties to the dispute insist upon reasons being given, the arbitrator is, as already observed earlier, under an obligation to give reasons. But there may be many arbitrations in which parties to the dispute may not relish the disclosure of the reasons for the awards. In the circumstances and particularly having regard to the various reasons given by the Indian Law Commission for not recommending to the Government to introduce an amendment in the Act requiring the arbitrators to give reasons for their awards we feel that it may not be appropriate to take the view that all awards which do not contain reasons should either be remitted or set aside. A decision on the question argued before us involves a question of legislative policy which should be left to the decision of Parliament. It is a well-known rule of construction that if a certain interpretation has been uniformly put upon the meaning of a statute and transactions such as dealings in property and making of contracts have taken place on the basis of that interpretation, the Court will not put a different interpretation upon it which will materially affect those transactions. We may refer here to the decision of the Court of Appeal rendered by Lord Evershed, M.R. in Brownsea Haven Properties v. Poole Corpn. in which it is observed thus:
‘... there is well established authority for
the view that a decision of long standing on
the basis of which many persons will in the
course of time have arranged their affairs
should not lightly be disturbed by a superior
court not strictly bound itself by the
decision.’"
(emphasis supplied) In the present case, the arbitrator was directed to give a reasoned award by an order dated 20-11-1981 of the High Court. That he is bound to do. 22. But the question is, where the arbitrator had given sufficient reasons is it incumbent upon the Appellate Tribunal also to give reasons more so, while confirming the same? When an award is subject to an appeal, what is the position? 23. In Commercial Arbitration by Mustill & Boyd, (2nd Edn.) it is stated at pp. 364-365 as under:
"When the appeal tribunal has made an award,
whether confirming, reversing or varying the
decision of the original arbitrators, it is
the award of the appeal tribunal which defines
the rights of the parties.
The appellate award, once made, completely
replaces the original award of the
arbitrators." 24. In the case on hand, the Appellate Tribunal has confirmed the award in the manner set out as above. When the Tribunal upheld the award dated 19-7-1983 of the sole arbitrator, it stands to reason that it has come to be confirmed for the same reasons as prevailed with the sole Arbitrator. To insist upon such reasons to be repeated by the appellate authority will only be superfluous. An arbitration procedure should be quick. Such proceedings 11 1958 Ch 574: (1958) 1 All ER 205 : (1958) 2 WLR 137 383 cannot be equated to court proceedings nor do they partake the character of trial. To insist upon the Appellate Tribunal to furnish reasons for its confirmatory order is not warranted. 25. From the above extract it is manifest that:
1. Non-reasoned award is not violative of
natural justice.
2. Equally, such an award would not put a
party under a disadvantage, in that, he is
unable to question the same by discerning the
error apparent on the face of the record. The plea of the respondents for which reliance is placed on the above-quoted passage from Mustill & Boyd (2nd Edn.) is when an arbitrator’s award is subject to an appeal the final award is the appellate award and the original award is replaced. Therefore, it is the appellate award that is made the rule of the court. Hence, reasons must be given by the appellate authority. This contention cannot be accepted in view of what we have held above. 26. Of course, if the Appellate Tribunal reverses the arbitrator’s award, it may be required to give reasons but that is not the position here. 27. The essence of arbitration is to avoid cumbersomeness of the court procedure to have a fair settlement. It is true that the award of the Appellate Tribunal is the final award and it is that which is to be made the rule of court. The court, by looking at the original award as confirmed by the order of the Appellate Tribunal, can always discern the reasons which in this case are fully contained in the award dated 19-7-1983 of the sole Arbitrator. 28. In this view, we find great difficulty in upholding the impugned judgment. Accordingly, it is set aside. The civil appeal stands allowed. However, there shall be no order as to costs. 384