The main legal point established in the judgment is the requirement for the arbitrator to state reasons for the amount awarded and the limitations of judicial interference with arbitration awards.

1. This appeal by the State of Kerala is against the order dated 14-8-1986 made in O.P.(ARB) No. 332/85 by the Principal Sub Judge. Thiruvananthapuram. By the impugned order, the learned trial judge(a) dismissed the appellant's petition No. 332/85 for setting aside the award in favour of the respondent Contractor and (b) made a decree in terms of the award of the Arbitrator which granted to the respondent a sum of Rs.3,64,986.00 under various claims made by him.

2. The appellant awarded to the respondent contract for the construction of KIP - RBC formation of Sasthamkotta branch canal. Under this contract dated 26-2-1982, the work was to be completed within 12 months from 17-4-1982. Certain differences arose between the parties. The disputes in the terms of claims made by the Respondent were referred to the arbitration of Gopinathan Nair, retired Chief Engineer, P.W.D. The appointment of the Arbitrator was made in accordance with Clause.52 of the contract styled as "local competitive bidding" in respect of "Kallada Irrigation Project".

3. Clause.52 of the contract provides inter alia the mode of appointment of the sole arbitrator. Mr.Gopinathan Nair, Chief Engineer, P.W.D. Kerala State, was appointed the sole arbitrator in accordance with Clause.52 of the contract. However, Mr Nair subsequently retired from service of the Government. Nevertheless the parties proceeded with the arbitration, the Arbitrator completed the proceedings and made the award.

An important stipulation in Clause.52 relevant to this appeal is this:

" All awards shall be in writing and in the case of awards amounting to Rs.l lakh and above, such awards shall state the reasons for the amount awarded". (Emphasis supplied)

4. The appellant wants us to set aside the award. Therefore, it is necessary to bear in mind the grounds on which a court can set aside awards made by arbitrators. S.30 of the Arbitration Act provides the grounds on which an award of the Arbitrator can be set aside. It lays down that an award shall not be set aside except on one or more of the grounds set out therein. One of such grounds is that the arbitrator or umpire has "misconducted himself of the proceedings". The appellant urged that the arbitrator "misconducted the proceedings". An arbitrator misconducts the proceedings (1) when there is a defect in the procedure followed by him (ii) commits breach and neglect of duty and responsibility (iii) acts contrary to the principles equity and good conscience (iv) acts without jurisdiction or exceeds it (v) acts beyond the reference (vi) proceeds on extraneous circumstances (vii) ignores material documents (viii) bases the award on no evidence. While it is difficult to give an exhaustive list of acts which constitute misconduct of the proceedings, the above stated grounds broadly cover such grounds. These acts constitute legal misconduct.

5. According to learned counsel for the appellant the misconduct of the proceedings has occurred for this reason. The contract between the parties enjoins the Arbitrator to "state the reasons for the amount awarded". The award of various amounts under item Nos. 17(a), 17(b), 17(c), 17(g), 170) and 17(1) of the statement of claims, are not based on proper and adequate reasons. In other words, the grounds stated in support of the award do not constitute reasons. It is true that under Clause.52 of the contract the Arbitrator is bound to state reasons, not generally, but "for the amount awarded". The literal meaning of "reason" is "a ground or motive for a belief or a course of action; a statement in justification or explanation of belief or action". (New Webster's Dictionary of the English Language Deluxe Encyclopedia Edition.) It is in this sense that the award must state reasons for the amount awarded.

The rationale of the requirement of reasons is that reasons assure that the Arbitrator has not acted capriciously. Reasons reveal the grounds on which the Arbitrator reached the conclusion which adversely