E.S.VENKATARAMIAH - (1.) THE common question which arises for consideration in these cases which are very neatly argued by learned counsel on both the sides is whether an award passed under the provisions of the ARBITRATION AND CONCILIATION ACT, 1940 (hereinafter referred to as 'the Act') is liable either to be remitted under S. 16(l)(c) of the Act or liable to be set aside under S. 30(c) thereof merely on the ground that no reasons have been given by the arbitrator or umpire, as the case may be, in support of the award.
(2.) ORDINARILY all disputes arising under a contract have to be settled by courts established by the State. S. 28 of the Indian Contract Act, 1872 provides that every agreement by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void to that extent. Exception 1 to the said S. 28, however, provides that the said S. shall not render illegal a contract by which two or more persons agree that any dispute which may arise between them in respect of any subject or class of subjects shall be referred to arbitration, and that only the amount awarded in such arbitration shall be recoverable in respect of the dispute so referred. A brief history of the English Law of Arbitration, is given in the learned treatise - The Law and Practice of Commercial Arbitration in England by Sir Michael J. Mustill and Stewart C. Boyd. For centuries commercial men preferred to use arbitration rather than the courts to resolve their business disputes on account of the inherent advantages in the settlement of disputes by arbitration. They preferred this alternative method of settlement of disputes to the ordinary method of settlement through courts because arbitration proceedings were found to be cheap and quick. It was no doubt true that the courts repeatedly expressed doubts as to the wisdom of this preference as reflected by the current opinion that arbitration was an ineffective procedure, not that it was undesirable in itself. The commercial community, has been however, insisting on the right to arbitration and has always exhibited an interest in seeing that the system is made to work as well as possible. This led to repeated statutory intervention. Accordingly laws were passed from time to time to make the arbitration proceedings effective. The English Arbitration Act of 1950 and the English Arbitration Act, 1979 are the two major pieces of legislation which now control the arbitration proceedings in England. The legal requirements of an award under English law are succinctly given in the Hand Book of Arbitration Practice by Ronald Bernstein 1987. English law does not impose any legal requirement as to the form of valid award but if the arbitration agreement contains any requirement to the form of the award the award should meet those requirements. The award must be certain. It could be either interim or final. An award without reasons is valid. "The absence of reasons does not invalidate an award. In many arbitrations the parties want a speedy decision from a tribunal whose standing and integrity they respect, and they are content to have an answer Yes or No; or a figure of X. Such an award is wholly effective; indeed, in that it cannot be appealed as being wrong in law it may be said to be more effective than a reasoned award."
(3.) S. I of the English Arbitration Act, 1979, however, provides that if it appears to the -High court that an award does not or does not sufficiently set out the reasons for the award in sufficient detail to enable the court to consider any question of law arising out of it, the court has power to order the arbitrator or umpire to give reasons or further reasons.;