Holding

An arbitral award must contain reasons for its conclusions under Section 31(3) of the Arbitration and Conciliation Act, 1996, and a court must first remit the award to the tribunal to supply such reasons before setting it aside.

Summary

The contractor, Mis. Som Datt Builders Ltd., entered into a highway works contract with the State of Kerala and later claimed additional costs for extended time and equipment usage. The Engineer failed to decide on several claims, leading the contractor to refer the dispute to arbitration, where the tribunal awarded the claims but did not provide reasons for claims 1 and 48. The State challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996, and the High Court set aside those two claims for lack of reasons, violating Sections 28(3) and 31(3). Both parties appealed to the Supreme Court, which examined whether the arbitral tribunal was required to state reasons and whether the High Court should have remitted the award for reasons to be recorded. The Court held that Section 31(3) mandates reasons unless the parties agree otherwise or the award falls under Section 30, and that the High Court should have given the tribunal an opportunity to supply reasons under Section 34(4). Consequently, the Supreme Court set aside the High Court judgments, restored the State's petition, and ordered the award to be remitted to the arbitral tribunal for reasons before further hearing.

Issues considered

The arbitral tribunal must state reasons for its award under Section 31(3) of the Arbitration and Conciliation Act, 1996, unless exempted.
Whether the High Court erred in setting aside the award without giving the arbitral tribunal an opportunity to provide reasons under Section 34(4).
The applicability of Sections 28(3) and 30 of the Act to the award in question.

Legislation cited

Arbitration and Conciliation Act, 1996s. 28(3), s. 30, s. 31(3), s. 34(4)

Subjects

ArbitrationArbitral awardReasons for awardSection 31(3)Section 34Contract worksExtension of timeAward set asideRemand

Judgment

[2009] 14 (ADDL.) S.C.R. 611

MIS. SOM DATT BUILDERS LTD. A
}-
v.
-~
STATE OF KERALA
(Civil Appeal No. 3089 of 2006)
;
SEPTEMBER 17, 2009
8
[TARUN CHATTERJEE AND R.M. LODHA, JJ.]

Arbitration and Conciliation Act, 1996:
.,,
s. 31 (3) - Arbitral award - Arbitral tribunal required to give c
reasons in support of the award - On facts, no reason indicated
in the award to reflect thought process leading to conclusion
- Matter remitted to ADJ who would first remit award to Arbitral
tribunal for stating reasons in support of the decision -
Thereafter ADJ to proceed with the hearing and objections. D
_.
The parties entered into works contract. Under the
(,
contract, the co'1_tractor was to complete the work within
forty-two months. The work could not be completed
within the agreed period. The time for completion of work
was extended on two occasions; in all by 25 months. The E
case of the contractor was that the extension of time was
not for any fault of theirs and as a matter of fact they had
. to continue the site office in Cochin; that they also
J.
incurred additional expenditure in relation to their work
at Cochin and that further expenditure towards F
equipment ownership charges in respect of the
machinery worth crores of rupees continued to be
employed for the work. The contractor, therefore, raised
..
l

claims under diverse heads before the Engineer .
According to the contractor, the Engineer took decision G
concerning claim no. 1 but the said decision was not
j implemented and regarding other claims, no decision
was taken. Matter was referred for arbitration. The arbitral
tribunal passed its award. State filed petition under
• 611 H
612 SUPREME COURT REPORTS (2009] 14 (ADDL.) S.C.R.

A Section 34 of the Arbitration and Conciliation Act, 1996
""{.
before the District judge which was dismissed on the ~

ground that there were sufficient reasons recorded by the
.arbitral tribunal for allowing claims under different heads.
High Court allowed the appeal in part and set aside the
B .award relating to claim nos. 1 a~d 4B on the ground that
the findings thereon did not have supporting reasons
being violative of See.tions 28(3) and 31 (3) of the
Arbitration and Conciliation Act, 1996. ·Both ·the .parties
filed appeals. ~

c · Disposing of the appeals and remitting the matter to
Additional Sessions Judge, the Court

HELD: 1.1. The perusal of award showed that there
were no reasons in support of claim no. 1 and 4B. Section
D 31(3) of Arbitration and Conciliation Act, 1996 mandates
that the arbitrai award shall state the reasons upon which ,,....
it is based, unless - (~) the parties have agreed that no
reasons ar~ to be given or (b) the· award is an arbitral
award under Section 30. It is not in dispute that the
E present case i1 not covered by. clauses (a) and (b). In the
circumstances, it was obligatory for the arbitral tribunal
to state reasons in support of its award in respect of claim
. .

nos. 1 and 4B, By legislative mandate, it is now essential ..
for the arbitral tr~bunal to give· reasons· in support of the ,.I..

F award. The 1996 Act is based on UNCITRAL Model Law
which has a provision of stating the reasons upon which
the award is based. [Para 20 and 21] [622-G-H; 623~A-C]

Union .of India v. Mohan Lal Capoor (1973) 2 SCC 836;
Woo/combers of India Ud. .v. ··Woo/combers Workers Union
G and another AIR 1973 SC 2758; S.N. Mukherjee v. Un;on of
India (1990) 4 SCC 594; Delhi Electric Supply Undertaking I
-l.
v. Victor Cable Industries Limited & Anr. 2006 (1) Arb. LR·
297-{Delhi); .Mis. Kµmar Construction Comptmy v. Delhi
Development Authority &Anr; 64 (1966) DLT 553, referred
H
SOM DATT BUILDERS LTD. v. STATE OF KERALA 613

to. A
).-
1.2. The requirement of reasons in support of the
award under Section 31(3) is not an empty formality. It
guarantees fair and legitimate consideration of the
,. controversy by the arbitral tribunal. It is true that arbitral
B
tribunal is not expected to write judgment like a court nor
it is expected to give elaborate and detailed reasons in
support of its finding/s but mere noticing the submissions
of the parties or referehce to documents is no substitute
p
for reasons which the arbitral tribunal is obliged to give.
Howsoever brief these may be, reasons must be
c
indicated in the. award as that would reflect thought
process leading to a particular conclusion. To satisfy the
requirement of Section 31 (3), the reasons must be stated
by the arbitral tribunal upon which the award is based;
want of reasons would make such award legally flawed. D
.... It cannot be said that High Court was wrong in observing
that no reasons were assigned by the arbitral tribunal as
-r to whether the period of completion extended by the
employer for 18% months was due to reasons not
attributable to the claimant. However, the High Court E.
ought to have given the arbitral tribunal an opportunity
to give reasons. The award under claim no. 5 is inter-
"' related to claim no. 1. Objections to Claim no. 6 may also
l. be re-examined by the Additional District Judge. The
petition by the State of Kerala against the award is F
restored to the file of the .Additional District Judge for
fresh hearing and consideration of the objections in
respect of claim nos. 1, 48, 5 and 6. However, the
Additional District Judge shall first remit the award to the
Arbitral Tribunal for stating their reasons· in support of G
claim nos. 1 and 48 and after receipt of the reasons from
the arbitral tribunal proceed with the hearing and disposal
of objections. [Paras 25, 27 and 28] [624-D·H; 625·A-F;
626-A-C]
H·
614 SUPREME COURT REPORTS [2009] 14 (ADDL.) S.C.R.

A Case Law Reference:

(1973) 2 sec 836 referred to Para 21
,;
A1R 1973 SC 2758 referred to Para 22
-
(1990) 4 ~cc 594 referred to Para 23
B
2006 (1) Arb. LR-297 referred to Para 24
(Delhi)

· 64 (1966) DLT 553 referred to Para 24
c CIVIL AP PELLATE JURISDICTION : Civil Appeal No.
3089 of 2006.

From the Judgment & Order dated 3.6.2005 of the High
"I
Court of Kerala at Ernakulam in Arbitration Appeal No. 16 of
0 2005.

WITH

C.A. No. 3090 of 2006.

E V.A. Mohta, Arvind Minocha, Veena.Minocha and Nilakant
Nayak for the Appellant.

T.L.V. Iyer, G. Prakash and B. Anand for the Respondent.

The Judgment of the Court was delivered by
F
R.M. LODHA, J. 1. These two appeals by special leave
arise from the Judgment and Order dated Jun~ 3, 2005 passed
by the High Court of Kerala and hence were heard together
and are being disposed of by this common judgment.
G 2. The State of Kerala represented by the Chief Engineer,
National Highway, Public Works Department awarded a
contract to Mis. Som Datt Builders Limiteq (for short,
'contractor') relating to road work of National Highway-47. The
works were : (i) four laning and strengthening of Alwaye-Vyttila;
H
SOM DATI BUILDERS LTD. v. STATE OF KERALA 615
[R.M. LODHA, J.]
(ii) four laning and strengthening of Vyttila-Aroor and (iii) four A
laning of Aroor-Cherthala stretches. The terms and conditions
>-· mentioned in the special and general conditions of the contract
(Sections IV & Ill respectively) were integral part of the
conditions specified in the contract. Under the contract, the
contractor was to complete the works within forty-two months. 13
That the work could not be completed within the agreed period
is not in dispute. It is also an admitted position that the time
for completion of work was extended on two occasions; in all
by 25 months. The case of the contractor is that the extension
... of time was not for any fault of theirs and as ci matter of fact c
they had to continue the site office in Cochin; that they also
incurred additional expenditure in relation to their work at
Cochin and that further expenditure towards equipment
ownership charges in respect of the machinery worth crores of
rupees continued to be employed for the work. The contractor,
D
therefore, raised claims under diverse heads before the
..., Engineer on February 22, 1998. According to the contractor,
the Engineer took decision concerning claim no. 1 but the said
decision was not implemented and regarding other claims, no
decision was taken necessitating the contractor to seek
reference of the dispute to arbitration. E

3. On January 11, 1999 an arbitral tribunal comprising
three Arbitrators was constituted and all claims of the contractor
"' were referred for adjudication to the arbitral tribunal.
.l
F
4. On March 20, 1999 the contractor submitted their claim
along with supporting documents before the arbitral tribunal.
Claim no. 1 made by the contractor related to additional cost
on account of extended stay for reasons not attributable to
them. Claim no. 1 as per statement of claim is under three
heads, namely; (i) Equipment ownership charges for Rs.
G
10,43,49,369/-; (ii) Site over-heads for Rs. 9, 16,31,609/-; and
\ (iii) Head Office over-heads for Rs. 2,45,68,507/- totaling
Rs.22.05,40,405/-.

Claim no. 48 amounting to Rs. 3,33,924.69 related to H
SOM DATI BUILDERS LTD. v. STATE OF KERALA 617
[R.M. LODHA, J.]

by the arbitral tribunal for allowing each claim. A
>-
10. The State of Kerala then approached the High Court
by filing an appeal against the judgment and order of the 2nd
Additional District Judge dismissing their petition under
Section 34 of the Act, 1996. B
11 . The Division Bench heard the appeal and vide its
judgment dated June 3, 2005 allowed the appeal in part and
. set aside the award relating to claim nos. 1 and 48 on the
ground that the findings thereon do not have supporting reasons
c
being violative of Sections 28(3) and 31(3) of the Act, 1996.
The Division Bench also set aside the interest awarded on
these two counts claimed under claims 7B and 7C .
•
12. Both the parties are aggrieved by the judgment of the
Division Bench. Civil Appeal No. 3089 of 2006 has been D
... preferred by the contractor aggrieved by the said judgment to
the extent the award relating to claim nos. 1 and 48 has been
set aside whereas Civil Appeal No. 3090 of 2006 is at the
instance of the State of Kerala dissatisfied with the award
relating to claim nos. 5 and 6.
E
13. It is appropriate that few clauses of Conditions of the
A>
Contract referred to by the Learned Senior Counsel during the
.{
course of arguments are noticed by us first.

14. Clause 1.1 (a)(i) defines 'Employer' as follows : F
"EMPLOYER" means the Governor· of the State
(India) or his successors in office and assigns. The
Chief Engineer-in-charge of the Project will be the
assignee for the Project."
G
15. Clause 1.1 (a)(iv) defines 'Engineer' thus :

"ENGINEER" means the Superintending Engineer
of the PWD, appointed as the Project Director of
this Contract or any other person appointed by the H
618 SUPREME COURT REPORTS [2009] 14 (ADDL.) S.C.R.

A Employer, by notice in writing to the Contractor, to
·-1.
act in replacement of the !=ngineer."

16. The procedure for claims is set out in clauses 53.1 to
53.5 which read thus :
B "53, 1. Notwithstanding any other provision of the Contract,
if the Contractor intends to claim any additional payment ~
,...
pursuant to any Clause of these Conditions or otherwise,
he shall give notice of his intention to the Engineer, ~ith a
copy to the Employer, within 28 days after the event giving >
c rise to the claim has first arisen.

53.2. Upon the happening of the event referred to in Sub-
Clause 53.1, the Contractor shall keep such contemporary
records· as may_reasonably.be necessary to support any
.
D claim he may subsequentfy wish to make. Without
necessarily admitting the Employer's liability,-lhe Engineer ....
shall,· on receipt of a notice under Sub-Gla\;lse~.53.1,
inspect ..$.u.Gh~c.ontemporary -records and may instruct the
. _C.oritractorJo J~eep any further conterriporaty ~ecords as are
reasonable and may be material to the claim of which
E
notice has been given. The Contractor shall permit the
Engineer to inspect all records kept pursuant to this Sub-
Clause and shall supply him with copies thereof as and
when the Engineer so instructs.
..
>-
F 53.3. Within 2a~days or such other reasonable time as may
be agreed by the Engineer, of giving notice under Sub-
Clause 53.1, the Contractor shall send to the Engineer an
account giving detailed particulars of the amount claimed
and the grounds upon which the claim is based. Where the
G event giving rise to the claim has a continuing effect, such .:31S
account shall be considered to be an interim account and ·
the Contractor shall, at such intervals as the Engineer may
1
reasonably require, send further interim accounts giving the
accumulated amount of the claim and any further grounds
H upon which it is based. In cases where interim accounts
SOM DATT BUILDERS LTD. v. STATE OF KERALA 619
[RM. LODHA, J.]

are sent to the Engineer, the Contractor shall send a final A
account within 28 days of the end of the effects resulting
from the event. The Contractor shall, if required by the
Engineer so to do, copy to the Employer all accounts sent
"' to the Engineer pursuant to this Sub-Clause.

53.4. If the Contractor fails to comply with any of the
B
provisions of this Clause in respect of any claim which he
seeks to make, his entitlement to payment in respect
thereof shall not exceed such amount as the Engineer or
any arbitrator or arbitrators appointed pursuant to Sub-
Clause 67.3 assessing the claim considers to be verified c
by contemporary records (whether or not such records
were brought to the Engineer's notice as required under
·-,
Sub-Clauses 53.2 and 53.3).

-1 53.5. The Contractor shall be entitled to have included in D
any interim payment certified by the Engineer pursuant to
., Clause 60 such amount in respect of any claim as the
~
Engineer, after due consultation with the Employer and the
Contractor, may consider due to the Contractor provided
that the Contractor has supplied sufficient particulars to E
enable the Engineer to determine the amount due. If such
... particulars are insufficient to substantiate the whole of the
-4 claim, the Contractor shall be entitled to payment in respect
of such part of the claim, as such particulars may
substantiate to the satisfaction of the Engineer. The
F
Engineer shall notify the Contractor of any determination
made under this Sub-Clause, with a copy to the Employer."
r
17. As regards settlement of dispute, the relevant clauses
are 67.1 to 67.4 which provide as follows:
~ G
1. "67.1. If a dispute of any kind whatsoever arises between
the Employer and the Contractor in connection with, or
arising out·of, the Contract or the execution of the Works,
whether during the execution of the Works or after their
completion and whether before or after repudiation or other H
620 SUPREME COURT REPORTS (2009) 14 (ADDL.) S.C.R.

A tennination of the Contract, including any dispute as to any
-.....;
opinion, instruction, determination, certificate or valuation
of the Engineer, the matter in dispute shall, in the first
place, be referred in writing to the Engineer, with a copy
to the other party. Such reference shall state that it is made
;)
B pursuant to this Clause. No later than the eighty-fourth day
after the day on which he received such reference the
~
Engineer shall give notice of his decision to the Employer
and the Contractor. Such decision shall state that it is
made pursuant to this Clause. _)...

c Unless the Contract has already b~en repudiated or
terminated, the Contractor shall, in every case, continue
to proceed with the Works with all due diligence and the
Contractor and the Employer shall give effect forthwith to
every such decision of the Engineer unless and until the ~

D same shall be revised, as hereinafter provided, in an
~
amicable settlement or an arbitral award.

If either the Employer or the Contractor be dissatisfied with /'

any decision of the Engineer, or if the Engineer fails to give '-.-
)

.E notice of his decision on or before the eighty-fourth day
after the day on which he received the reference, then
l
either the Employer or the Contractor may, on or before
the seventieth day after the day on which he received notice ..
of such decision, or on or before the seventieth day after 1, J.
the day on which the said period of 84 days expired, as
F the case may be, give notice to the other party, with a copy
for information to the Engineer, of his intention to
commence arbitration, as hereinafter provided, as. to the
'
matter in dispute. Such notice shall establish the .....I.
entitlement of the party giving the same to commence_.,
G arbitration, as hereinafter provided , as to such dispute
and, subject to Sub-Clause 67.4, no arbitration in respect -1
thereof may be commenced unless such notice is given.

If the Engineer has given notice of his decision as to a
H
SOM DATT BUILDERS LTD. v. STATE OF KERALA 621
[R.M. LODHA, J.]

> matter in dispute to the Employer and the Contractor and A
no notice of intention to commence arbitration as to such
dispute has been given by either the Employer or the
Contractor on or before the seventieth day after the day on
which the parties received notice as to such decision from .
the Engineer, the said decision shall become final and B
binding upon the Employer and the Contractor.

67.2 ....... " ..

67.3 ............ ..
c
67.4. Where neither the Employer nor the Contractor has
given notice of intention to commence arbitration of a
dispute within the period stated in Sub-Clause 67.1 and
the related decision has become final and binding, either
party may, if the other party fails to comply with such D
decision, and without prejudice to any other rights it may
have, refer the failure to arbitration in accordance with Sub-
Clause 67.3. The provisions of Sub-Clauses 67.1 and 67.2
shall not apply to any such reference."

18. Mr. V.A. Mohta, learned senior counsel for tne contractor E
submitted that the High Court was not justified in holding that
• no reasons have been assigned by the Arbitral Tribunal in
" support of their award in respect of claim nos. 1 and 48. He
referred to : definitions of 'Employer' and 'Engineer'; clause 7.1
; communication dated April 23, 1998 from the Project Director F
to the Chief Engineer, PWD, National Highways (which
according to him is a decision by the Engineer as regards claim
no. 1) and the communication dated May 11, 1998 from the
Chief Engineer to the Director General (Road), Ministry of
Surface (Transport), New Delhi and submitted that delay in G
1 completion of work is admitted by the Employer to be not
attributable to the contractor and, therefore no further reasons
were required to be given by arbitral tribunal while passing an
award for claim no. 1. Mr. V.A. Mohta also submitted that High
Court erred in setting aside the award in respect of claim no. H
622 SUPREME COURT REPORTS [2009] 14 (ADOL.) S.C.R.

A 48 even though valid reasons have been given in support of
-<
the said claim by the arbitral tribunal and the same are clearly
discernible from the award itself. In the alternative, learned
senior counsel submitted that if at all the High Court felt that

B
there are no reasons in support of the award, it ought to have
remitted the matter to the arbitral tribunal to give further
...
reasons. In .this regard, he relied upon Section 34(4) of the Act,
1996.

19. On the other hand, Mr. T.L.V. Iyer, learned senior ~
counsel for the respondent supported the view of the High Court
c insofar as claim nos. 1 and 4B are concerned. He, however,
assajled the High Court's view with regard to claim nos. 5 and
6 and submitted that the award in respect of these two claims
are not supported by reasons and award is legally flawed to
that extent.
D
~
20. It is true that communication dated April 23, 1998 sent.
by the Project Director to the Chief Engineer, National
Highways does deal with claim no. 1 submitted by the Contractor
on February 22, 1998 and he recommended overall equipment
E ownership charges and site over-heads for 12 months and
further recommended the claim for Rs.13,01,42,462/-. It is also
seen that the Chief Engineer (employer) vide his communication
dated May 11, 1998 to the Director General (Road), Ministry •
of Surface (Transport) referred to the aforesaid communication ~

F of the Project Director as a 'decision' under clause 67.1 by the
Engineer and requested the Ministry of Surface (Transport) to
settle the contractor's claim. Concededly, the aforesaid two
documents are referred to by the arbitral tribunal in the award
and arbitral tribunal has also noticed the arguments advanced
on behalf of the parties in support of their respective stand ~ut
G
reasons are not at all discernible in support of its finding that
the period of completion was exten1ed by the respondent for _f
18 % months due to reasons not attributable to the.contractor.
Having perused the award carefully, we have not been· able to -
find reasons in support of claim no. 1. The position is no better
H
SOM DATT BUILDERS LTD. v. STATE OF KERALA 623
[R.M. LODHA, J.]
In respect of award for claim no. 48. As a matter of fact, no A
> reason whatsoever has been assigned for awarding that claim.

21. Section 31 (3) mandates that 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
8
award is an arbitral award under Section 30. That the present
case is not covered by clauses (a) and (b) is not in dispute'. In
the circumstances, it was obligatory for the arbitral tribunal to
state reasons in support of its award in respect of claim nos. 1
_, and 48. By legislative mandate, it is now essential for the
arbitral tribunal to give reasons in support of the award. It is C
pertinent to notice here that Act, 1996 is based on UNCITRAL
Model Law which has a provision of stating the reasons upon
which the aW01rd is based. In Union of India v. Mohan Lal
Gapoor, this Court said, 'reasons are the links between the
materials on which certain conclusions are based and the D
~ actual conclutions'.

22. In Woo/combers of India ltd. v. Woo/combers
Workers Union and Another-, this Court stated :
E
" ... The giving of reasons in support of their conclusions by
judicial and quasi-judicial authorities when exercising initial
jurisdiction is essential for various reasons. First, it is
calculated to prevent unconscious unfairness or
arbitrariness in reaching the .conclusions. The very search
for reasons will put _the authority on the alert and minimise F
the chances of unconscious infiltration of personal bias or
unfairness in the conclusion. The authority will adduce
reasons which. will be regarded as fair and legitimate by
a reasonable man and will discard irrelevant or extraneous
considerations .... " G
3
23. In S.N. Mukherjee v. Union of /ndia the Constitution
- - -
1. (1973) 2 sec 836.
,

2. AIR 1973 SC 2758.
3. (1990) 4 sec 594. H
624 SUPREME COURT REPORTS (2009] 14 (ADDL.) S.C.R.

A Bench held that recording of reasons :
--<
(i) guarantee consideration by the authority; (ii) introduce
clarity in the decisions; and (iii) minimise chances of
arbitrariness in decision making.
B 24. Learned senior counsel for the contractor referred to
a decision of Delhi High Court in the case of Delhi Elect;;c
Supply Undertaking v. Victor Cable Industries Limited & Anr4.
and submitted that where the arbitrator has referred to f~cts of
the case and has noticed some reasoning which in view of .>--
c Arbitrator was sufficient to arrive at conclusion for granting relief,
award cannot be stated to be unreasoned. He also referred to
yet another decision of Delhi High Court in the case of Mis.
Kumar Construction Company v. Delhi Development
Authority& Anr6 wherein it has been observed that the Arbitrator
D is not expected to write elaborate judgment and where
Arbitrator has noticed contentions of the counsel, it cannot be ~
said that Arbitrator failed in stating reasons for the award.

25. The requirement of reasons in support of the award
under Section 31(3) is not an empty formality. It guarantees fair
E
and legitimate consideration of the controversy by the arbitral
tribunal. It is true that arbitral tribunal is not expected to write
judgment like a court nor it is expected to give elaborate and
detailed reasons in support of its finding/s but mere noticing •
the submissions of the parties or reference to documents is no ).
F substitute for reasons which the arbitral tribunal is obliged to
give. Howsoever brief these may be, reasons must be indicated
in the award as that would reflect thought process leading to a
particular conclusion. To satisfy the requirement of Section
31(3), the reasons must be stated by the arbitral tribunal upon
G which the award is based; want of reasons would make such
award legally flawed. In what we have discussed above, it ..,,
cannot be said that High Court was wrong in observing that no ,...A,

4. 2006 (1) LR-297 (Delhi)

H 5. 64 (1996) DLT 553.
SOM DATT BUILDERS LTD. v. STATE OF KERALA 625
[R.M. LODHA, J.]

._ reasons have been assigned by the arbitral tribunal as to A
whether the period of completion extended by the employer for
18 Y2 months was due to reasons not attributable to the
claimant. However, in our view, the High Court ought to have
given the arbitral tribunal an opportunity to give reasons. This
course is available under Section 34(4) of the Act which reads B
thus:

"1 ..........

2 ..........
c
3 ...........

4. On receipt of an application under sub-section(1 ), the
Court may, where it is appropriate and it is so requested
by a party, adjourn the proceedings for a period of time
D
determined by it in order to give the arbitral tribunal an
-+
opportunity to resume the arbitral proceedings or to take
such other action as in the opinion of arbitral tribunal will
eliminate the grounds for setting aside the arbitral award."

26. We are informed by the learned senior counsel for the E
claimant that all the three persons constituting arbitral tribunal
are available and if award is remitted to them for recording
~
reasons, there should not be any impediment in their doing so.
.... This course appears to us to be fair and reasonable .
F
27. The award under claim no. 5 is inter-related to claim
no. 1. Objections to Claim no. 6 may also be re-examined by
the Additional District Judge now since petition under Section
34 is being restored to the file of that court.

28. We, accordingly, dispose of these two appeals by the G
following order:
'1
(i) The judgment of the High Court dated June 3, 2005 and
the iudgment dated February 23, 2005 passed by the 2nd
Additional District Judge, Ernakulam are set aside. H
626 SUPREME COURT REPORTS [2009] 14 (ADDL.) S.C.R.

A (ii) The: petition (0.P. Arb. 71/2004) by the State of Kerala
against the award dated December 20, 2003 is restored
to the file of the 2nd Additional District Judge, Ernakulam
for fresh hearing and consideration of the objections in
respect of claim nos. 1, 48, 5 and 6.
B
(iii) However, the 2nd Additional District Judge, Ernakulam
shall first remit the award to the Arbitral Tribunal for stating
their reasons in support of claim nos. 1 and 48 and after
receipt of the reasons from the arbitral tribunal proceed
with the he_aring and disposal of objections .
c
(iv)· Parties ·shall bear their own costs.

D.G. Appeals disposed of.