IMPORTANT POINTS
A textual interpretation that matches the contextual is known to be the best.
Conclusion supported by reasons would constitute a “finding” irrespective of whether the reasons are erroneous.
Arbitral agreement requiring the arbitrator to give findings on each item implies giving reasons therefor.

JUDGMENT :-

T.S. THAKUR, J.

1. A non-speaking arbitral award in favour of the appellant-company was set aside by a learned Single Judge of the High Court of Delhi on the ground that the Arbitrator had not recorded his “findings” as required under Clause 70 of the General Conditions of Contract. Relying upon the decisions of this Court in M/s Daffadar Bhagat Singh and Sons v. Income-tax officer, A Ward, Ferozepur (AIR 1969 SC 340), Bhanji Bhadgwandas v. The Commissioner of Income-tax, Madras (AIR 1968 SC 139 and Rajinder Nath etc. v. Commissioner of Income-tax, Delhi (AIR 1979 SC 1933) the High Court held that the expression “finding” appearing in Clause 70 of the General Conditions of Contract implies something more than the mere recording of a conclusion by the Arbitrator. Inasmuch as the Arbitrator had failed to do so, the award rendered by him was unsustainable. The High Court accordingly set aside the award and remitted the matter back to the Arbitrator for a fresh determination of the disputes between the parties.

2. An appeal was then preferred by the appellant-company before a Division Bench of the High Court who relying upon the decision of this Court in Gora Lal v. Union of India (2003) 12 SCC 459 affirmed the view taken by the learned Single Judge. Dissatisfied, the appellant has approached this Court by special leave.

3. When the matter initially came up before a Bench comprising R.V. Raveendran and J.M. Panchal, JJ. on th January, 2009 the Court noticed a divergence in the decision rendered by this Court in Gora Lal’s case (supra) and that rendered in Build India Construction System v. Union of India (2002) 5 SCC 433. The matter was, therefore, referred to a larger Bench to resolve the conflict. That is precisely how this appeal has been listed before us.

4. Clause 70 of the General Conditions of Contract to the extent the same is relevant for our purposes, is to the following effect:

“…………The Arbitrator shall give his award within a period of six months from the date of his entering on his reference or within the extended time as the case may be on all matters referred to him and shall indicate his findings, along with sums awarded, separately on each individual item of dispute.”

5. A plain reading of the above would show that the Arbitrator was required to (i) give his award within the stipulated period as extended from time to time. (ii) the Award must be on “all matter referred to him” (iii) the Award must indicate the findings of the Arbitrator along with sums, if any, awarded (iv) the findings and award of sums if any must be separate on each item of dispute. There is no gainsaying that Clause 70 makes a clear distinction between findings on each individual item of dispute on the one hand and the sum, if any, awarded in regard to the same on the other. That the Arbitrator had made his award in regard to each item of dispute raised by the appellant before it, is evident from a reading of the award. The question is whether the Arbitrator had recorded his findings on each such items. The High Court has, as noted above, answered that question in the negative; and set aside the award holding that the expression ‘findings’ must include the reasons for the ultimate conclusion arrived at by the Arbitrator. That view was assailed by learned counsel for the appellant who contended that the expression ‘findings’ should not imply the process of reasoning adopted by the Arbitrator for recording his conclusions. A finding howsoever cryptic would, according to the submission of the learned counsel for the appellant, satisfy the requirement of Clause 70 for otherwise the Clause would have been differently worded so as to make it mandatory for the Arbitrator to make what is called a speaking award giving reasons for the conclusions arrived at by him.

6. On behalf of the respondent it was per contra argued by Mr. P.S. Patwalia and Mr. J.S. Attri, learned senior counsel that the question was no longer res-integra having been ad