2024 Supreme(Mad) 2597
IN THE HIGH COURT OF JUDICATURE AT MADRAS
K.KUMARESH BABU, J.
Mr.V.Ravichandran - Petitioner
Vs.
Mrs.Pushpavalli Suresh Babu - Respondent
Arb.O.P.(Comm.Div) No.185 of 2021 O.A.No.423 of 2021, A.No.61 of 2021 & A.Nos.4965 of 2024
Decided On : 19-12-2024
Advocate Appeared:
For the Petitioner: Mr.M.S.Krishnan Sr. counsel for M/s.S.B.Legal
For the Respondent: Mr.Aravid Pandian Sr.Counsel for Mr.Hari Shankar Mani
An arbitrator's award must reflect independent reasoning and consideration of both parties' submissions; verbatim repetition of one side's arguments violates due process and can render the award unfair.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Non-application of mind by the Arbitrator - Repetition of written submissions without original reasoning raises grounds for challenging the arbitral award - Arbitrator failed to consider both parties' submissions equally. (Paras 2, 4, 8, 10)
(B) Legal requirement for reasoned awards - An award must exhibit reasoning and analysis, distinguishing between the parties' submissions. (Paras 7, 10)
Facts of the case:
The petitioner contended that the arbitrator's award was unreasonable, merely replicating the respondent's submissions without adequate reasoning or consideration of the petitioner's case.
Findings of Court:
The award lacked independent reasoning as the arbitrator copied the claimant's written submissions verbatim, leading to a conclusion of bias and lack of application of mind.
Issues: Whether the arbitrator exercised due diligence in assessing the arguments from both parties and if the award should be set aside.
Ratio Decidendi: The court found that the arbitrator's failure to provide original reasoning rendered the award perverse and unjust, necessitating remand to a new arbitrator for a fair hearing.
Result: The impugned award was set aside and remitted back to a newly appointed arbitrator.
| Table of Content |
|---|
| 1. challenge based on unreasonableness of the award. (Para 2 , 3) |
| 2. arguments against application of mind by the arbitrator. (Para 4 , 5) |
| 3. court's assessment of the award compared to submissions. (Para 6 , 7) |
| 4. discussion on the standards expected from an arbitrator. (Para 8 , 9) |
| 5. final determination to set aside the award and remit the case. (Para 10 , 11) |
ORDER :
K. KUMARESH BABU, J.
Heard Mr.M.S.Krishnan learned Senior counsel Counsel appearing for the petitioner and Mr.Aravind Pandian, learned Senior counsel appearing for Mr.Hari Shankar Mani, learned counsel appearing for the respondent.
2. Mr.M.S.Krishnan, the learned Senior counsel appearing for the petitioner at the outset would submit that the award suffers from unreasonableness. He would submit that the Arbitrator had just copy-pasted the written submissions of the respondent/claimant by only modifying the first few words of the written submissions. He would submit that under the written submissions, the respondent had opened with the words “humbly submitted”, the same had been replaced by the Arbitrator by the words, which would indicated that “it is the findings, reasoning of the Arbitrator”. He would therefore submit that there has been no application of mind on the part of the Arbitrator. On the conduct of the Arbitrator, he had also alleged bias and would plead that if this Court was of the opinion to call for reasons from the Arbitrator in view of the biased, it may not be proper but would request this Court to set aside the award and appoint a new Arbitrator to hear the parties concern and pass an award based upon the proceedings that had culminated upto the filing of written submissions by respective parties. He had also relied upon the judgment of the Bombay High Court in the case of German Remedies Ltd., Mumbai vs. Pratibhas S. Tiwatane & Anr., reported in 2010 1 MhLJ 761 and contend that there should be a clear distinction between the submissions and the reasons. A submissions of the party in the form of written submission cannot be lifted bodily by the Judicial Officer incorporating them as his own reasons. Even if the Judge is to agree with the submissions of one party, the reasons and language must be in own reasons. In that context, he would submit that the Arbitrator had lifted bodily the written submissions of the respondent and he had not given any reasons as to why the written submission of the respondent is acceptable and the written submissions filed by the petitioners was not acceptable. He would also submit that the Arbitrator had not treated the parties equally and only for that reasons, he would submit that if this Court may come to the conclusion that the matter has to be remanded back, then it should be remanded back to the independent Arbitrator.
3. Countering his arguments, Mr.Aravid Pandian the learned Senior counsel on behalf of the respondents would submit that there is no error on the part of the Arbitrator to bodily lift the contentions in the written submission of the respondents to be the findings of the Arbitrator. According to him, the said conduct of the Arbitrator in accepting the submissions made by the respondent and rejecting the submissions made by the petitioner is fair and acceptable. In that context, he had also relied upon the judgment of the Hon'ble Apex Court in the cases of Associate Builders vs. Delhi Development Authority reported in (2015) 3 SCC 49 , National Insurance Company Ltd., vs. Boghara Polyfab Pvt., Ltd. reported in (2013) 4 SCC 688 and Union of India vs. Singh Builders Syndicate reported in (2015) 14 SCC 609 . By placing reliance on the judgments, he would submit that the verbatim reproduction of submissions does not necessarily indicate bias, it is shown that the Arbitrator had arrived at the just and reasonable conclusion based upon the submission and evidence presented by both parties. He would also submit that the judgment of the Bombay High Court relied upon by the learned Senior c