TMI Blog2014 (10) TMI 550X X X X Extracts X X X X X X X X Extracts X X X X ..... trator 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. Court declared that Government and their instrumentalities should - as a matter of policy and public interest - if not as a compulsion of law, ensure that whenever they enter into an agreement for resolution of disputes by way of private arbitrations, the requirement of speaking awards is expressly stipulated and ensured. Any laxity in that behalf might lend itself and perhaps justify the legitimate criticism that government failed to provide against possible prejudice to public interest. The predominant use of the expression is in relation to determination by a Judge, Jury, Administrative Agency, Arbitrator or a Referee. The determination is described either as a finding, decision or conclusion; upon disputed facts. It is also described as a determination of a fact supported by evidence on the record. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 appellantcompany 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 5th 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expression finding appearing in Clause 70 would include reasons in support of the conclusion drawn by the arbitrator, we consider it appropriate to refer to the Constitution Bench decision of this Court in Raipur Development Authority v. M/s Chokhamal Contractors etc (1989) 2 SCC 721 where this Court was examining whether an award without giving reasons can be remitted or set aside by the Court in the absence of any stipulation in the arbitral agreement obliging the arbitrator to record his reasons. Answering the question in the negative, this Court held that a non-speaking award cannot be set aside except in cases where the parties stipulate that the arbitrator shall furnish reasons for his award. This Court held : 33 When the parties to the dispute insist upon reasons being given, the arbitrator is, as already observed earlier, under an obligationto give reasons. But there may be many arbitrations in which parties to the dispute may not relish the disclosure of the reasons for the awards. In the circumstances and particularly having regard to the various reasons given by the Indian Law Commission for not recommending to the Government to introduce an amendment in the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot as a compulsion of law ensure that wherever they enter into agreements for resolution of disputes by resort to private arbitrations, the requirement of speaking awards is expressly stipulated and ensured. It is for Governments and their instrumentalities to ensure in future this requirement as a matter of policy in the larger public interest. Any lapse in that behalf might lend itself to and perhaps justify, the legitimate criticism that Government failed to provide against possible prejudice to public interest. 9. Reference may also be made to The Arbitration and Conciliation Act, 1996 which has repealed the Arbitration Act of 1940 and which seeks to achieve the twin objectives of obliging the Arbitral Tribunal to give reasons for its arbitral award and reducing the supervisory role of Courts in arbitration proceedings. Section 31(3) of the said Act obliges the arbitral tribunal to state the reasons upon which it is based unless the parties have agreed that no reasons be given or the arbitral award is based on consent of the parties. There is, therefore, a paradigm shift in the legal position under the new Act which prescribes a uniform requirement for the arbitrators to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used. A textual interpretation that matches the contextual is known to be the best. The principle is well settled but the decision of this Court in Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd. And Ors. (1987) 1 SCC 424 has sounded a timely reminder of the same when it said: Interpretation must depend on the text and the context. They are the bases of interpretation. One may well say if the text is the texture, context is what gives the colour. Neither can be ignored. Both are important. That interpretation is best which makes the textual interpretation match the contextual. A statute is best interpreted when we know why it was enacted. With this knowledge, the statute must be read, first as a whole and then section by section, clause by clause, phrase by phrase and word by word. If a statute is looked at, in the context of its enactment, with the glasses of the statute-maker, provided by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different than when the statute is looked at without the glasses provided by the context. With these glasses we must look at the Act as a whole and discover what each secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g; an inferential statement; the closing, settling, or final arranging of a treaty, contract, deal, etc. 14. It is trite that a finding can be both; a finding of fact or a finding of law. It may even be a finding on a mixed question of law and fact. In the case of a finding on a legal issue the Arbitrator may on facts that are proved or admitted explore his options and lay bare the process by which he arrives at any such finding. It is only when the conclusion is supported by reasons on which it is based that one can logically describe the process as tantamount to recording a finding. It is immaterial whether the reasons given in support of the conclusion are sound or erroneous. That is because a conclusion supported by reasons would constitute a finding no matter the conclusion or the reasons in support of the same may themselves be erroneous on facts or in law. It may then be an erroneous finding but it would nonetheless be a finding. What is important is that a finding presupposes application of mind. Application of mind is best demonstrated by disclosure of the mind; mind in turn is best disclosed by recording reasons. That is the soul of every adjudicatory process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are of the view that the arbitrator was required to give reasons in support of his findings on the items of dispute along with the sums awarded. We make it clear that this order is confined to the facts of this case and our interpretation is confined to clause 70 of the arbitration agreement in this case. 16. In the case at hand the Arbitrator s award was admittedly unsupported by any reason, no matter the Arbitrator had in the column captioned findings made comments like sustained , partly sustained , not sustained . The High Court was, therefore, justified in setting aside the award made by the Arbitrator and remitting the matter to him for making of a fresh award. 17. That brings us to the decision of this Court in Build India Construction System (supra) which was relied upon to canvass that it stated a proposition contrary to that stated in Gora Lal s case (supra). In Build India Construction System (supra) this Court noted in no uncertain terms that the validity of the award had not been specifically questioned on the ground of its having been given in breach of any obligation of the Arbitrator to give reasons as spelled out by the arbitration clause. The judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned counsel for the appellant that the High Court has directed the Arbitrator to make an award in terms of the Arbitration and Conciliation Act, 1996. Since, however, the arbitration proceedings had been conducted under the old Act any remission to the Arbitrator could only be under the provisions of the said Act. Mr. Patwalia, learned Additional Solicitor General, did not dispute that position. He submitted that this Court could make it clear that the Arbitrator would conduct the proceedings under the provisions of the Arbitration Act, 1940. 20. It was lastly argued by learned counsel for the appellant that since the proceedings have remained stayed for a considerable period, this Court could direct the Arbitrator to dispose of the same expeditiously. Our attention was, in this connection, drawn to a letter dated 2nd March, 2009 whereby the respondents have appointed Shri Dharma Sheel, Supdt. Engineer (Personnel and Legal) Headquarter as a Sole Arbitrator to adjudicate upon the dispute between the parties as Col. Dalip Banerjee, earlier appointed had expressed his inability to continue nor was Col. S.N. Kuda, initially appointed, ready to go on with proceedings. It was urged t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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