Mere Non-Mentioning Of Place Of Arbitration In Arbitral Award Does Not Vitiate It: Allahabad High Court
The Allahabad High Court has held that mere non-mentioning of the place of arbitration in the arbitral award does not vitiate it.An arbitral award between the parties was challenged before the Commercial Court, Prayagraj where it was held that since the place of arbitration was not mentioned in the award, it was non-speaking and was, thus, set aside. Both parties challenged the order of...
The Allahabad High Court has held that mere non-mentioning of the place of arbitration in the arbitral award does not vitiate it.
An arbitral award between the parties was challenged before the Commercial Court, Prayagraj where it was held that since the place of arbitration was not mentioned in the award, it was non-speaking and was, thus, set aside. Both parties challenged the order of the Commercial Court before the High Court under Section 37 of the Arbitration and Conciliation Act, 1996.
Counsel for appellant-claimant, M/s Mukesh and Associates, argued that lack of mention of place of arbitration in the award does not make it non-speaking. It was argued that once the arbitration clause mentioned that the proceedings were to be conducted at Allahabad, the arbitration cannot be held elsewhere.
Per contra, counsel for Motilal Nehru National Institute of Technology, Allahabad challenged the order of the Commercial Court on grounds that the award was not dealt with on its merits.
Perusing the arbitration clause, the Court observed that parties had agreed to the place of arbitration as Allahabad by stating that “proceedings will be conducted at ALLAHABAD”.
“Once the agreement between the parties in this regard is clear and specific and it is nobody's case that the said clause was, in any way, violated and/or on account of any intervening circumstance, the Commercial Court at Prayagraj had no jurisdiction to deal with the matter, the mere absence of mentioning of place of arbitration in the award impugned, by itself would not vitiate the award,” held the bench of Chief Justice Arun Bhansali and Justice Kshitij Shailendra.
The Court held that merely because Section 31 of the Arbitration and Conciliation Act, 1996 provides that the place of arbitration to be indicated on the arbitral award, it is not a mandatory condition so as to make an award invalid.
“The mentioning or absence of such mention in the arbitral award may assume significance, in a case where there is dispute between the parties on the said aspect, which is not the case in the present matter. All the clauses of Section 31 cannot be viewed in a manner that absence of any of the requirements enumerated therein would lead to award being vitiated.”
Further, the Court observed that the Commercial Court had already made up its mind regarding the award due to non-mention of the place of arbitration and had not dealt with any arguments on merits.
Accordingly, the order of the Commercial Court was set aside.
Case Title: M/s Mukesh and Associates v. Motilal Nehru National Institute of Technology (MNNIT), Allahabad [APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 460 of 2024]
Counsel for Appellant: Naman Agarwal, Nipun Singh, Parijat Srivastava
Counsel for Respondent: Bidhan Chandra Rai, S A Husain
