Dissenting Opinion Of An Arbitrator Cannot Be Treated As An Award If The Majority Award Is Set Aside : Supreme Court

 The Supreme Court held that a dissenting opinion cannot be treated as an award if the majority award is set aside.

In this case, a three member arbitration tribunal passed an award in a dispute between Hindustan Construction Company Limited and National Highways Authority of India. The award was unanimous on most questions while, on others, there was a dissenting view of one of the arbitrators. The Bombay High Court (DB) set aside the award observing that the tribunal’s majority view, and award, were based on an implausible interpretation of the contract.

In appeal, the Apex Court bench of Justices S. Ravindra Bhat and Aravind Kumar observed that the awards which contain reasons, especially when they interpret contractual terms, ought not to be interfered with, lightly. In this context, the court observed:

"The prevailing view about the standard of scrutiny- not judicial review, of an award, by persons of the disputants’ choice being that of their decisions to stand- and not interfered with, [save a small area where it is established that such a view is premised on patent illegality or their interpretation of the facts or terms, perverse, as to qualify for interference, courts have to necessarily chose the path of least interference, except when absolutely necessary]. By training, inclination and experience, judges tend to adopt a corrective lens; usually, commended for appellate review. However, that lens is unavailable when exercising jurisdiction under Section 34 of the Act. Courts cannot, through process of primary contract interpretation, thus, create pathways to the kind of review which is forbidden under Section 34. So viewed, the Division Bench’s approach, of appellate review, twice removed, so to say [under Section 37], and conclusions drawn by it, resulted in displacing the majority view of the tribunal, and in many cases, the unanimous view, of other tribunals, and substitution of another view. As long as the view adopted by the majority was plausible- and this court finds no reason to hold otherwise (because concededly the work was completed and the finished embankment was made of composite, compacted matter, comprising both soil and fly ash), such a substitution was impermissible."

While allowing the appeal, the court also considered the relevance of dissenting opinion and observed:

"It is, therefore, evident that a dissenting opinion cannot be treated as an award if the majority award is set aside. It might provide useful clues in case there is a procedural issue which becomes critical during the challenge hearings. This court is of the opinion that there is another dimension to the matter. When a majority award is challenged by the aggrieved party, the focus of the court and the aggrieved party is to point out the errors or illegalities in the majority award. The minority award (or dissenting opinion, as the learned authors point out) only embodies the views of the arbitrator disagreeing with the majority. There is no occasion for anyone- such as the party aggrieved by the majority award, or, more crucially, the party who succeeds in the majority award, to challenge the soundness, plausibility, illegality or perversity in the approach or conclusions in the dissenting opinion. That dissenting opinion would not receive the level and standard of scrutiny which the majority award (which is under challenge) is subjected to. Therefore, the so-called conversion of the dissenting opinion, into a tribunal’s findings, [in the event a majority award is set aside] and elevation of that opinion as an award, would, with respect, be inappropriate and improper."

Hindustan Construction Company Limited vs National Highways Authority of India - 2023 LiveLaw (SC) 704- 2023 INSC 768

Arbitration and Conciliation Act, 1996 ; Section 34 - A dissenting opinion cannot be treated as an award if the majority award is set aside. It might provide useful clues in case there is a procedural issue which becomes critical during the challenge hearings - When a majority award is challenged by the aggrieved party, the focus of the court and the aggrieved party is to point out the errors or illegalities in the majority award. The minority award (or dissenting opinion, as the learned authors point out) only embodies the views of the arbitrator disagreeing with the majority. There is no occasion for anyone- such as the party aggrieved by the majority award, or, more crucially, the party who succeeds in the majority award, to challenge the soundness, plausibility, illegality or perversity in the approach or conclusions in the dissenting opinion. That dissenting opinion would not receive the level and standard of scrutiny which the majority award (which is under challenge) is subjected to.  (Para 27)

Arbitration and Conciliation Act, 1996 ; Section 34, 37 -  Awards which contain reasons, especially when they interpret contractual terms, ought not to be interfered with, lightly - Appellate review is unavailable when exercising jurisdiction under Section 34 of the Act - Courts cannot, through process of primary contract interpretation, thus, create pathways to the kind of review which is forbidden under Section 34.  (Para 22-23)

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