Arbitration Act, 1940: Arbitrator-Award-Duty to give reasons- Reasons given by Arbitrator-Award affirmed by Appellate Tribunal- Insistence upon appellate Tribunal to furnish reasons for confirmation held not warranted

Delhi Hindustani Mercantile Association Rules and Regulations:- Rule 37-Regulations 7 and 10-Arbitrator-Award-Appeal against Provisions for.

The appellant claimed a sum of Rs. 4,51,246.50 from the first respondent. In turn the first respondent also made a counter claim against the appellant. Both being members of the Delhi Hindustani Mercantile Association, their dispute was referred to an Arbitrator under the Rules of the Association. By its order dated 20.11.1981 the High Court directed that in terms of the concession made on behalf of the Mercantile Association and the sole Arbitrator, a reasoned award shall be passed by the Arbitrator. Consequent to the said direction, the sole Arbitrator entered upon the reference and by his reasoned award dated 19.7.1983 awarded a sum of Rs. 1,97,891.81 in favour of the appellant with 18% interest till the date of payment. The first respondent preferred an appeal before the Tribunal which confirmed the Arbitrator's award without assigning any reasons. Thereafter, the appellant filed a suit for making the award a rule of the Court but a single Judge of the High Court set aside the Award on the ground that it was bereft of reasons and thus runs counter to the High Court's order dated 20.11.1981. Consequently the award was remitted to the tribunal for reconsideration and for giving reasons. The appellant preferred appeal before the High Court which was dismissed in limine.

In appeal to this Court it was contended on behalf of the appellant that since the Arbitrator gave a reasoned award it was not necessary for the Tribunal to give reasons as it merely affirmed the Tribunal's award. 

On behalf of the respondents it was contended that when the appellate Tribunal confirms or reverses the original award, its award not only completely replaces the original award but also defines the rights of the parties and therefore, such an award must contain its reasons to enable the parties to know as to why the appellate Tribunal has come to such a conclusion.

Allowing the appeal and setting aside the impugned judgment of the High Court, this Court.