Non-speaking Award does not comply with Section 31(3) of the Arbitration & Conciliation Act, 1996, and can be remanded back to the arbitrator for a fresh decision.

VALMIKI J. MEHTA, J. (ORAL)

FAO No.323/2012

1. The Award in this case passed by the arbitrator and which is dated 15.9.2009 is clearly a non-speaking Award. This becomes clear from paras 9.1 to 9.5 of the Award and which read as under:-

“9.1 All claims of Claimant as para 5(a) to (d), are ‘disallowed’, being ‘unjustified’.

9.2 The Counter Claim of the Respondent/UOI, as at para 6(a) above, for Rs.17,50,153/- towards cost of stores not supplied is ‘allowed’, in favour of the Respondent/UOI and against the Claimant Firm, alongwith interest @ 18% P.A. from the date, the payment was received, by the Claimant till its actual realization.

9.3 The Counter Claim of the Respondent/UOI for Rs.63,614.98/- towards Liquidated Damages (LD) due to supplying the stores as at Para 6(b) is ‘allowed’ in favour of Respondent/UOI and against the Claimant being ‘justified’.

9.4 The Counter Claim of the Respondent/UOI for Rs.1622/- as at 6(c) above, towards cost of 66 pairs of shoes and other recoveries reflected by the consignees on copies No.2& 5 of the Inspection Notes is ‘allowed’ by in favour of the Respondent/UOI and against the Claimant, being ‘justified’.

9.5 Rs.50,000/- is awarded as cost of proceedings, as at para 6(d), in favour of the Respondent/UOI and against the Claimant Firm, for unnecessary dragging the Respondent/UOI into an avoidable litigation.”

2. As per Section 31(3) of the Arbitration & Conciliation Act, 1996 the Award has to be a reasoned Award or a speaking Award.

3. By the impugned judgment, though the objections to the Award have been allowed, nothing further has been done for remanding the matter to the arbitrator for fresh decision in accordance with law. That there is power to remand the matter after setting aside of the Award is no longer res integra in view of the judgment of this Court in the case of BSNL Vs. Canara Bank & Anr. 169 (2010) DLT 253 (DB).

4. In view of the above, even taking the impugned judgment setting aside the Award as final, yet the impugned judgment is to be faulted with because it fails to remand the matter back to the arbitrator for a fresh decision in accordance with law.

5. In view of the above, this appeal is allowed to the limited extent that the disputes between the parties which are subject matter of the arbitration proceedings are remanded for a fresh decision to the arbitrator in accordance with law from the stage of final arguments. In case the arbitrator who has passed the Award, for some reason is not available, then a fresh arbitrator will be appointed as per the arbitration clause/agreement between the parties and to which respondent has no objection, and who would give due notice to the respondent before commencement of hearing in the arbitration proceedings.

6. Appeal is disposed of in terms of aforesaid observations, leaving the parties to bear their own costs.

FAO No.326/2012

7. This FAO is also remanded back to the arbitrator in terms of the observations made while disposing of FAO No.323/2012.