Findings of an Arbitrator

The soul of every adjudicatory process is the recording of reasons.” It indicates a ‘disclosure of mind‘, which in turn demonstrates an ‘application of mind‘. In Raipur Development, (1989) 2 SCC 721 however, the SC held that a Non-Speaking Arbitral Award cannot be set aside except in cases where the parties stipulate that the Arbitrator shall furnish reasons for his Award. In Anand Brothers v. Union of India, (2014) 9 SCC 212 an Arbitrator, conducting proceedings under The Old Act, was governed by the Condition of Contract that he shall indicate his ‘findings‘ separately on each item of dispute. The Arbitrator’s Award was admittedly unsupported by any reason, no matter the Arbitrator had in the column captioned ‘findings‘ made comments like ‘sustained‘, ‘partly sustained‘, ‘not sustained‘. Were his findings, findings at all? While answering in the negative, the SC drew upon the “paradigm shift in the legal position under The New Act”, which is an exposition of the earlier legislation. Section 31(3) of The Arbitration and Conciliation Act, 1996 obliges Arbitral Awards to state reasons upon which it is based unless the parties have agreed that no reasons are to be given or the Arbitral Award is based on the consent of the parties. It was held, “The judicial climate in which Arbitral Awards are being made and viewed also lends itself to an interpretation that would make it obligatory for the Arbitrator to record reasons in support of the findings recorded by him.” A finding should imply something more than the mere recording of a conclusion.