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Issues: (i) Whether an arbitral award can be sustained when its reasoning is muddled, conflates submissions with findings, and does not disclose intelligible reasons; (ii) Whether the High Court should have interfered with the award without first resorting to the curative course under Section 34(4) of the Arbitration and Conciliation Act, 1996.
Issue (i): Whether an arbitral award can be sustained when its reasoning is muddled, conflates submissions with findings, and does not disclose intelligible reasons.
Analysis: Section 31(3) of the Arbitration and Conciliation Act, 1996 requires reasons in an arbitral award unless the parties agree otherwise. The legal requirement is not of an elaborate judgment, but the award must still contain reasons that are proper, intelligible and adequate. A court may, in suitable cases, read reasons impliedly from the award and the material before the tribunal, but an award that is confused, internally mixed with pleadings and arguments, and does not reveal the basis of the conclusion becomes unintelligible. Such an award cannot be sustained merely because the tribunal has reached a result on the claim.
Conclusion: The award, in its existing form, was held to be unintelligible and unsustainable.
Issue (ii): Whether the High Court should have interfered with the award without first resorting to the curative course under Section 34(4) of the Arbitration and Conciliation Act, 1996.
Analysis: Section 34(4) empowers the court, where appropriate and on request, to adjourn proceedings and give the tribunal an opportunity to resume the proceedings or take action to eliminate grounds for setting aside the award. This provision is intended to cure defects such as absence or inadequacy of reasons. The judgment emphasises that courts should be cautious in setting aside arbitral awards and should ordinarily prefer curing remediable defects rather than frustrating the arbitral process.
Conclusion: The curative jurisdiction under Section 34(4) was recognised as the proper course in appropriate cases, though the prolonged dispute led the Court itself to finally mould relief.
Final Conclusion: The appellate interference was not sustained in the form adopted below, and the dispute was brought to an end by substituting a monetary award in favour of the claimant for the surviving claim.
Ratio Decidendi: An arbitral award must disclose intelligible and adequate reasons; where the deficiency is curable, courts should ordinarily consider the remedial power under Section 34(4), but an unintelligible award cannot be sustained on the basis of mere inference from the record.
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