Delhi High Court
Foresight Shipping Corpn. vs Uoi & Anr. on 4 May, 2009
Author: Shiv Narayan Dhingra
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Reserve: March 27, 2009
Date of Order: May 04, 2009
+ CS(OS) 505-A/1994
% 04.05.2009
Foresight Shipping Corpn. ...Petitioner
Through: Mr. Vijaykishan with Mr. Sanjeev Sharma & Mr. Vikram Jetly,
Advocates
Versus
UOI & Anr. ...Respondent
Through: Mr. Valmiki Mehta, Sr. Adv. with Mr. Deepak Dewan,
Advocates
AND
+ CS (OS) 523-A/1994
%
Foresight Shipping Corpn. ...Petitioner
Through: Mr. Vijaykishan with Mr. Sanjeev Sharma & Mr. Vikram Jetly,
Advocates
Versus
UOI & Anr. ...Respondent
Through: Mr. Valmiki Mehta, Sr. Adv. with Mr. Deepak Dewan,
Advocates
JUSTICE SHIV NARAYAN DHINGRA
1. Whether reporters of local papers may be allowed to see the judgment? Yes.
2. To be referred to the reporter or not? Yes.
3. Whether judgment should be reported in Digest? Yes.
JUDGMENT
1. By making an application under Section 14(2) of Arbitration Act, 1940,
the learned Arbitrator filed an award signed by the Arbitrators on 22 and 29th
October 1993 respectively, in the Court. Notice of this award was sent to the
parties and respondent filed objections against the award that this Court had
no territorial jurisdiction to entertain the application and that the Arbitrator
CS (OS) 505A and 523A of 1994 Page 1 Of 5
mis-conducted in rendering a non-speaking award in spite of a specific
request made by the Objector in the appointment letter that the Arbitrator
should render a reasoned award. The other objections raised by respondent
are that the Arbitrator erroneously awarded different amounts as stated in
the award to the petitioner and erroneously rejected the claim of the
Objectors. It is stated that allowing the claims of the petitioner and rejecting
the claims of respondent tantamounted to misconduct on the part of the
Arbitrator.
2. This Court on 17th January 1997 framed the following issues:
"1. Whether the award passed by the Arbitrator is liable to
be set aside in view of the objections filed by the
respondents against the award.
2. Relief."
3. Issue No.1: Counsel for the objector /respondent during arguments
stated that the Arbitrator in this case exceeded his jurisdiction by filing an
application under Section 14(2) of Indian Arbitration Act with a prayer that
this Court should make the award a rule of Court and should give further
reliefs which it may deem fit. It is submitted that it was none of the duties of
the Arbitrator to request the Court to make the award a rule of Court.
4. Filing of an award is a ministerial act. Section 14 of the Arbitration Act,
1940 is not exhaustive and it does not lay down how the award has to be filed
by an Arbitrator. An award can be filed by the Arbitrator in the Court on the
request of one of the parties or when none of the parties comes forward, suo
motto. There is no bar on the Arbitrator on filing an award in the Court suo
motto. It may be that the Arbitrator was not advised properly and he need not
CS (OS) 505A and 523A of 1994 Page 2 Of 5
have filed award with an application and with a prayer that the award be
made rule of court and should have left this to the parties; but merely
because the Arbitrator filed the award with an application under Section 14
with a prayer that the award be made rule of court, does not tantamount to
committing of any illegality or misconduct. Filing of an award is not a judicial
or quasi judicial act of the Arbitrator. The Arbitrator could have sent the
award to the Court by post instead of filing it in the Court through an
advocate. An award cannot be set aside on the ground that it was filed by the
Arbitrator in the Court through an advocate with an application under Section
14(2) of the Act.
5. Coming on merits, counsel for the respondent argued that the award
was a non speaking award and he drew my attention to the letter appointing
the Arbitrator wherein it was mentioned by the objector (Union of India) that
the Arbitrator should give a speaking award. In AIR 1994 SCC 219 Food
Corporation of India v. Jagdish Chandra Saha, the Supreme Court observed
that an award cannot be set aside on the ground that the Arbitrator has not
given the reasons in the award made by him so long as the arbitration clause
does not contain that giving of reasons was necessary for the Arbitrator. This
Court in Express Engg. Con. Co. v. Municipal Corp. 1982 RLR 88, dealt with
the question whether one of the parties can require Arbitrator to make a
speaking award. This Court observed that one party has no power to lay down
such a condition at the time of appointment of an Arbitrator if the arbitration
agreement does not provide for a speaking award. A party cannot unilaterally
lay down that the award has to be a speaking award. I consider that the
objection raised by the petitioner on the ground of award being a non-
speaking award must fail.
CS (OS) 505A and 523A of 1994 Page 3 Of 5
6. The other contention is about misconduct of the Arbitrator. Merely
because the Arbitrator has allowed a claim of the petitioner and rejected the
claim of the objector does not amount to misconduct. The petitioner has
failed to bring on record any other misconduct of the arbitrators, judicial or
non judicial. A perusal of award would show that the Arbitrators passed the
award on the basis of evidence led by the parties and have given calculations
for the amount awarded in favour of the petitioner. Though no detailed
reasons have been given by the Arbitrator but this Court and the Apex Court
has time and again held that reasonableness of reasons given by the
Arbitrator cannot be challenged. It is not open to the Court to speculate
where no reasons are given by the Arbitrator, as to what implied him to arrive
at a conclusion. In M/s Sudarsan Trading Co. v. The Govt. of Kerala & Anr. AIR
1989 SCC 890, the Supreme Court observed:
"29. The next question on this aspect which requires
consideration is that only in a speaking award the court can
look into the reasoning of the award. It is not open to the court
to probe the mental process of the arbitrator and speculate,
where no reasons are given by the arbitrator, as to what
impelled the arbitrator to arrive at his conclusion. See the
observations of this Court in Hindustan Steel Works
Construction Ltd. v. C. Rajasekhar Rao, [1987] 4 SCC 93. In the
in 684 instant case the arbitrator has merely set out the claims
and given the history of the claims and then awarded certain
amount. He has not spoken his mind indicating why he was
done what he has done; he has narrated only how he came to
make the award. In absence of any reasons for making the
award, it is not open to the court to interfere with the award.
Furthermore, in any event, reasonableness of the reasons given
by the arbitrator cannot be challenged. Appraisement of
evidence by the arbitrator is never a matter which the court
questions and considers. If the parties have selected their own
CS (OS) 505A and 523A of 1994 Page 4 Of 5
forum, the deciding forum must be conceded the power of
appraisement of the evidence. The arbitrator is the sole judge
of the quality as well as the quantity of evidence and it will not
be for the court to take upon itself the task of being a judge on
the evidence before the arbitrator. See the observations of this
Court in Municipal Corpn. of Delhi v. M/s Jagan Nath Ashok
Kumar & Anr. [1987] 4 SCC 497. "
7. The other contention raised by the objector /respondent is that the
interest @ 11% per annum awarded by the Arbitrator was on the higher side.
I consider that it was not proper for this Court to modify the rate of interest as
granted by the Arbitrator. Even otherwise, the interest awarded by the
Arbitrator was not on the higher side.
8. Relief: I find no merits in the objections. The objections are
hereby dismissed. The award is hereby made rule of Court.
May 04, 2009 SHIV NARAYAN DHINGRA J.
rd
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