Dissenting Views Of Minority Members Does Not Constitute An Arbitral Award: Kerala High Court

The Bench, consisting of Justices P.B. Suresh Kumar and C.S. Sudha, ruled that the dissenting views of the minority member(s) of an Arbitral Tribunal does not constitute an Arbitral Award, and the dissenting views cannot be made the basis of a proceeding under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act) for setting aside the arbitral award or proceedings under Section 36 for its enforcement.

Greater Cochin Development Corporation (GCDA) invited tenders for a construction contract. The appellant Lloyed Insulations (India) Ltd was declared the successful bidder and the contract was allotted to him. Thereafter, the appellant entered into a sub-contract with the respondent Foremexx Space Frames. After dispute arose between the parties, the arbitration clause was invoked and the Arbitral Tribunal passed an Award in favour of the respondent. In an application filed under Section 34 of the A&C Act by the appellant against the Award, the Subordinate Court only partly set aside the Award. The appellant filed an appeal before the Kerala High Court against the order passed by the Subordinate Court.

The appellant Lloyed Insulations submitted before the High Court that under the A&C Act there can only be one award made by the Arbitral Tribunal and not multiple awards. The appellant contended that there was a violation of the provisions of Sections 29 and 31 of the A&C Act since 4 different awards were passed in different dates by the Tribunal, which was not permissible. Therefore, the appellant averred that the Award passed by the Tribunal should have been set aside by the Subordinate Court.

The High Court observed that the Supreme Court in the case of Dakshin Haryana Bijli Vitaran Nigam Ltd versus M/s Navigant Technologies Pvt Ltd (2021) had held that the A&C Act recognises only one arbitral award being passed by an arbitral tribunal, which may either be a unanimous award or an award passed by a majority in the case of a panel of members. The Supreme Court had held that the view of a dissenting arbitrator is not an award, but only his opinion.

Therefore, the Court ruled that there can only be one award passed by the Arbitral Tribunal. The Court added that though there is no specific provision in the A&C Act providing for passing a dissenting view, the Act does not prohibit such an opinion being rendered by the minority member(s). The Court held that the views of the minority member(s) is not an arbitral award, but only a dissenting view and the same does not form a part of the award.

The Court held that the dissenting views given by the minority member(s) cannot be made the basis of a proceeding under Section 34 for setting aside the arbitral award or proceedings under Section 36 for its enforcement. The Court, however added that the dissenting views can be relied upon by the party seeking to set aside the arbitral award to buttress its submissions in the proceedings under Section 34.

The Court then considered as to whether the Arbitral Tribunal, consisting of three Arbitrators, had made multiple Awards, as contended by the appellant. The Court observed that the findings made by the two Arbitrators and the Presiding Arbitrator were documented in three different documents. The Court ruled that the findings arrived at by the first Arbitrator (Arbitrator No. 1), which was concurred to by the Presiding Officer, matured into an Award only when the same was concurred to by the Presiding Arbitrator.

The Court ruled that the dissenting views of the minority Arbitrator (Arbitrator No. 2), documented separately and though described as an Award, was only a dissenting view and it did not constitute an Award.

The Court held that though the findings of the Arbitrator No. 1, the concurrence recorded by the Presiding Arbitrator with the findings of Arbitrator No. 1, and the Majority Award signed by them were documented separately and described as Awards, they together constituted the final Award. The Court added that they were not separate awards but only parts of one final Award.

Also, the Court ruled that there was no infirmity or perversity in the findings of the Arbitral Tribunal, and the Court upheld the order of the Subordinate Court. The Court therefore, dismissed the appeal filed by the appellant.

Case Title: Lloyed Insulations (India) Ltd versus Foremexx Space Frames

Citation: 2022 LiveLaw (Ker) 178

Dated: 17.01.2022 (Kerala High Court)

Counsel for the Appellant: Mr S. Vinod Bhat and Mr Legith T. Kottakkal

Counsel for the Respondent: Mr K.L. Varghese (Sr.), Mr Ranjith Varghese, Mr Rahul Varghese and Ms Santha Varghese

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