Frontline Enterprises vs M/S. Chelsa Products
1999 Latest Caselaw 828 Del

ORDER

Mukul Mudgal, J.

1. There is no appearance on behalf of the respondents in Court today when the matter was called out.

2. This is a petition on behalf of the petitioner under Section 34 of the Arbitration & Conciliation Act, 1996 praying for setting aside the impugned Award dated 3rd November, 1997 which is passed by the respondent No. 2 in favour of respondent No. 1 and against the petitioner. The Arbitrator was appointed pursuant to Clause 23 of the Agreement dated 26.7.95 between the petitioner and the respondents.

3. It is not in dispute that no reasons have been given in the impugned Award dated 3.11.1997.

4. In fact the award reads as follows: "I, award a sum of Rs. 7,13,183.32/- (Rs. Seven lakhs thirteen thousand one hundred Eighty three and thirty two paise only) as price of the goods and a sum of Rs. 1,00,000/- (Rs. One lakh only) as damages to M/s. Chelsa Products against M/s. Frontline Enterprises with future interest at the rate of 18% per annum from the date this award and till the full and final payment of the above amount and also the cost of Rs. 4000/- (Rupees four thousand only) to be shared equally by the parties."

5. The Section 31(3) of the Arbitration & Conciliation Act, 1996 reads as follows :

   "The arbitral award shall state the reasons upon which it is    based, unless -  

   (a) the parties have agreed that no reasons are to be given, or  

   (b) the award is an arbitral award on agreed terms under Section    30." 
   

6.  It is not disputed that there was no agreement between the parties  that no reasons for the award was to be given or that the award is on  agreed terms under Section 33 of the Act. The arbitration clause No. 23 in  the Agreement dated 26th July, 1995 reads as follows:      "That in the event of any dispute arising out of and in the    course of the business under the present agreement, It shall be    settled by an arbitrator appointed by agreement at Delhi only.    Any other dispute shall be subject to the jurisdiction of courts    at Delhi only." 
  

7.  There is no other clause in the agreement dated 26th July, 1995 which  stipulates a waiver of reasons in support of the award.  
 

8. The learned counsel for the petitioner has relied upon a judgment of the Hon'ble Supreme Court in T.N. Electricity Board Vs. Bridge Tunnel Construction & Ors. to contend that after coming into force of the Arbitration & Conciliation Act, 1996 reasons are required to be given in support of the award. The present case is governed by the Act of 1996.

9. Accordingly, the petition is allowed and the impugned Award dated 3rd November, 1997 is hereby set aside.

10. In view of the above findings, the petition stands disposed of.