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2025 Supreme(Online)(Guj) 4492

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
HEMANT M. PRACHCHHAK, J
B.B.YADAV SINCE DECEASED THROUGH LEGAL HEIRS & ORS. – Appellant
Versus
FOOD CORPORATION OF INDIA & ANR. – Respondent
FIRST APPEAL NO. 1366 of 2002 | FIRST APPEAL NO. 1367 of 2002 | FIRST APPEAL NO. 1368 of 2002



Advocates:
For the Appellants/Petitioners: MR KG SUKHWANI
For the Respondents: MR NIRAD D BUCH

An arbitration award cannot be overturned unless there is a clear legal error; the arbitrator is not required to provide detailed reasoning for each claim.

Headnote:(A) Arbitration Act, 1940 - Section 39 - Appeals filed challenging the confirmation of an Arbitrator’s award - It is established that an award can only be set aside on grounds of evident legal errors and that an arbitrator is not obliged to specify details for each claim - A civil court does not act as an appellate body regarding the arbitrator’s decisions. (Paras 1-3) (

Facts of the case:
The appeals challenge the trial court's confirmation of an arbitration award without requiring the arbitrator to provide detailed reasoning on each claim.) (

Findings of Court:
The court agrees with the trial court that the issues are meritless given the binding precedent and dismisses the appeals.) (

Issues: Whether the arbitrator’s award can be overruled based on the grounds set forth and the extent of the court’s authority in arbitration matters.) (

Ratio Decidendi: Courts cannot interfere with an arbitrator's award unless there is a clear legal error, and there is no obligation to detail reasons. An award will stand if two reasonable interpretations exist.) (

Result: Appeals dismissed without costs.

Table of Content
1. presenting the case under arbitration act. (Para 1)
2. observations on the trial court's findings. (Para 2)
3. rationale regarding the sufficiency of arbitrator's awards. (Para 3)

1. Present appeals are filed by the appellant under Section 39 of the Arbitration Act , 1940 challenging the common judgment and order dated 08.02.2002 passed by the learned Judge, City Civil Court No.20, Ahmedabad (hereinafter be referred to as “the trial Court”) in Civil Misc. Application Nos. 388 of 1987, 603 of 1987 and 408 of 1987 whereby the trial Court has confirmed the award passed by the Arbitrator.

2. The trial Court, after considering the submissions and facts of the case, has observed in para – 8 and 9 which reads as under:-

“8. It is held by Gauhati High Court (Agartala bench) in the case of Unit OfÏcer, M/s. N.P.C.O. Ltd Vs. Madhusudan Dab Barma and others, reported in AIR 1979 Gauhati 62, after relying on AIR 1923 PC 66 and AIR 1967 SC 1030 , that “the Arbitrator gave no reason for the award. Consequently there is no legal proposition which may be said to be the basis of the award, with the result that there is no room for argument that the legal proposition is erroneous. Therefore, the argument that there is error in law on the face of the award cannot stand and must be rejected. It is further held that “there is also no force in the appellant’s contention that the Arbitrator was bound to give his award with respect to each claim. In the Supreme Court case referred to above it was held that the Arbitrator could give a lump sum award and he was not bound to give separate award for each claim.

9. Thus, the Arbitrator is not required to give his award with respect to each claim and not required to give any reason or finding in each claim and hence, I do not find any reason to set aside the award passed by the Arbitrator”

3. Mr.Sukhwani, learned counsel appearing for the appellant has submitted that the issue involved in the present appeals is squarely covered by the decision of the Division Bench of this Court dated 15.10.2019 rendered in First Appeal No. 692 of 1990 wherein the identical issue has been decided and, therefore, he is unable to argue further in the matter in light of the aforesaid decision. The relevant observation made in para – 24 is reproduced herein:-

“24. In view of the above mentioned various decisions, it can be safely said that, (A) Award can be set aside only on the ground of error of law on the face of it, in other words to say that if award is passed upon any legal proposition which is erroneous.

(B) The arbitrator is not required to give any reasons in detail at the time of considering the arbitration and afterwards in the award.

(C) The Civil Court can not sit as appellant court for award of the arbitrator and review or reappreciate the reasons given by the arbitrator and the award cannot be set aside mainly because there is any procedural error or the artibtrator has committed some mistake in arriving at his conclusion.

(D) When there are two views possible and the arbitrator accepts one of the views at that time the award cannot be interfered even if the another view is more appealing to the court.

(E) If the arbitrator has misconducted himself or the arbitrator has acted contrary to or gone beyond the terms of the reference then in such a case the award can be set aside by Civil Court.”

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