Andhra Pradesh High Court: Separate Opinion Signed By Co-Arbitrators In Majority Award Complies With Section 31 Of A&C Act

The Andhra Pradesh High Court held that a separate opinion signed by Co-Arbitrator(s) in a majority Award is in compliance with Section 31 of the Arbitration and Conciliation Act, 1996 (A&C Act).

The Court held thus in an International Commercial Arbitration Appeal preferred by a Chinese company, challenging the Judgment of the Single Judge in an International Commercial Arbitration Original Application.

A Division Bench of Justice Ravi Nath Tilhari and Justice Maheswara Rao Kuncheam observed, “… the award signed by majority or consented to or agreed upon by the majority and there being a separate opinion signed by other Co Arbitrator(s), would be in compliance with the statutory provisions of Section 31 (1) & (2) of the Act 1996, even if the reason for omission of the Co-Arbitrator, not signing the majority award, is not recorded as in such a case the opinion by itself would be the reason for omission to sign the majority award.”

The Bench said that as per Section 31 (1) and (2) of the A&C Act in the case of Arbitral Tribunal consisting of number of Arbitrators, the Award, if not signed by all, will still be valid, if it is signed by majority of Arbitrators and for the Arbitrator not signing the award, for such omission, the reasons have been assigned.

Advocate S. Ram Babu appeared on behalf of the Appellant while Advocate S. Vivek Chandrasekhar appeared on behalf of the Respondent.

Facts of the Case

The Appellant was a company incorporated in the Republic of China and engaged in the business of manufacturing refractories, whereas the Respondent was a company incorporated in India and engaged in the business of manufacturing steel products. As per the agreement, the Appellant had to supply to the Respondent 260 sets of ladles comprising both imported and indigenous material as per the delivery schedule. When the differences arose due to alleged incorrect interpretation of the terms, specifically regarding the delivery schedule, the Respondent deducted Rs. 15,72,960.52 towards liquidated damages from out of the amount payable to the Appellant on the allegation of the delayed delivery.

Thereafter, it deducted liquidated damages and despite the efforts of the Appellant, the Respondent did not release the amount payable to the Appellant. The Appellant then issued a notice to settle the dispute amicably and invoked the arbitration clause. The Arbitral Tribunal by a majority (by Presiding Arbitrator, and by Co-Arbitrator-2) passed an Award rejecting the major portion of the claims and awarded damages of Rs. 2,12,268/- payable to the Appellant’s consortium partner for the liquidated damages deducted for the first lot of supply. The Co-Arbitrator-1 passed a separate Award (minority award/opinion) directing the Respondent to pay the Appellant Rs. 1,59,638.50. Being aggrieved, the Appellant filed an Application which was dismissed by the Single Judge and hence, it filed an Appeal before the High Court.

Reasoning

The High Court after hearing the contentions of the counsel, noted, “In our view, it is very clear that the learned Single Judge was referring to the minority award/opinion. With respect to the majority award authored by the Presiding Arbitrator, the learned Single Judge clearly observed that it contained signatures on every page, and with respect to the concurring Co-Arbitrator, the learned Single Judge observed that, he passed a cryptic award that, the award proposed by the Presiding Arbitrator was perused etc., and was signed by him.”

The Court remarked that the copy filed before the Single Judge of the award by Co-Arbitrator consenting to the award of the Presiding Arbitrator, contained signature and therefore, what was observed by the Single Judge, regarding photostat or scanner may not copy writing depending on the ink used, was with respect to the minority award/opinion, though the Judge did not conclude, that the minority award/opinion was signed or not.

“Such observations came to be passed because the appellant did not file the correct copy of the minority award/opinion containing the signatures of the Co-Arbitrator-1. As to why such Photostat copy of the minority award/opinion was filed, which did not reflect the signature of that Co-Arbitrator-1? We place on record, that the same copy of the minority award/opinion of the Co Arbitrator-1 which did not reflect his signatures was filed in this appeal, along with the appeal”, it added.

The Court explained that if there is a single award, in the sense that only one Arbitrator has passed (authored) the award, and it contained his signatures, all or the majority of the other Arbitrators can sign thereon, the same award, or they can also by their separate award signed by them, consent to or concur with the same.

“But, in case such concurrence by either way, is only by majority, and not by all, the reasons for omission(s) of signing by the arbitrator failing to sign, shall be recorded, to make it an award valid and binding”, it clarified.

The Court further noted that the Presiding Arbitrator passed his award duly signed, the Co-Arbitrator-2 vide a separate award concurred with the award of the Presiding Arbitrator, and the Co-Arbitrator-1 passed his separate award/opinion and also signed his award.

Conclusion

“All these three awards were compiled by the Presiding Arbitrator and sent to the Registrar of the Indian Council of Arbitration, New Delhi, as also to the respective parties and their counsels. Consequently, the majority award of the Presiding Arbitrator and Co-Arbitrator-2 is valid and binding and there is no violation of Section 31 (1) & (2) of the Act 1996”, also held the Court.

It, therefore, concluded that the Single Judge rightly recorded that the majority award was valid and did not call for interference on the argument of Section 31 of the A&C Act.

Accordingly, the High Court dismissed the Appeal and imposed a cost of Rs. 1 lakh on the Appellant to be deposited with the Andhra Pradesh High Court Legal Services Committee within one month.

Cause Title- M/s. Orind Special Refractories Ltd. v. M/s. Rashtriya Ispat Nigam Ltd. (Case Number: International Commercial Arbitration Appeal No. 1 of 2025)

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