Recently, the division judge bench of the Allahabad High Court held that the mere fact that the form under Section 31 of the Arbitration and Conciliation Act inter alia indicates mentioning of place of arbitration, by itself does not make it mandatory to the extent that the lack of such mention in the award, without there being any challenge based on such absence, the award would stand vitiated.
Brief facts:
The factual matrix of the case is that the application under Section 34 of the Arbitration and Conciliation Act, 1996 (‘the Act’) was filed by MNNIT for setting aside the award passed by the Arbitral Tribunal in the matter of dispute between the parties. Thereafter, the commercial court came to the conclusion that as all requirements under Section 31 of the Act are mandatory, for non-mention of the place of arbitration by the Arbitrator, the award is non-speaking, the same cannot be set aside under Section 34 of the Act since it is not an award and consequently disposed of the application under Section 34 of the Act. Aggrieved by this, the appeals under Section 37 of the Act are directed against the judgment passed by the Commercial Court.
Contentions of the Appellant:
The learned counsel appearing on behalf of the Appellant submitted that the commercial court was not justified in coming to the conclusion that the award, for lack of mention of place of arbitration, was a non-speaking award and consequently was not an award at all. It was furthermore submitted that the arbitration clause between the parties is clear and specific providing that the proceedings will be conducted at Allahabad and jurisdiction will lie within the courts of Allahabad. Also, mere non-mentioning of the place of arbitration will not vitiate the award.
The learned counsel further relied upon the judgment titled Chandok Machineries v. M/s S.N. Sunderson & Co.
Observations of the court:
The Hon’ble Court observed that Section 31 of the Act deals with the form and contents of the award which enumerates that the same shall be made in writing, signed by the members of the Arbitral Tribunal, shall state the reasons upon which it is based, indicate the date and the place of arbitration and also provides exception to signing by all the members of the Arbitral Tribunal and stating reasons.
It was furthermore observed that mere fact that the form under Section 31 of the Act inter alia indicates mentioning of place of arbitration, by itself does not make it mandatory to the extent that the lack of such mention in the award, without there being any challenge based on such absence, the award would stand vitiated. The mentioning or absence of such mention in the arbitral award may assume significance, in a case where there is dispute between the parties on the said aspect, which is not the case in the present matter.
Based on these considerations, the court was of the opinion that the decision passed by the commercial court cannot be sustained.
The decision of the court:
With the above direction, the court allowed the appeal.
Case Title: M/s Mukesh and Associates v. Motilal Nehru National Institute of Technology (MNNIT), Allahabad
Coram: Hon’ble Mr. Chief Justice Arun Bhansali and Hon’ble Mr. Justice Kshitij Shailendra
Case No.:2025: AHC:25546-DB
Advocates for the Appellant: Naman Agarwal, Nipun Singh, Parijat Srivastava
Advocates for the Respondent: M/s Mukesh and Associates
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