Kinnari Mullick and Another v. Ghanshyam Das Damani

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Dev An Ramachandran
Judgment Date: 2020-07-23
Court Decision / Holding: The court scrutinizes the Division Bench’s remand directive under S.34(4) and concludes that Parliament has not empowered the Court to remand the matter to the Arbitral Tribunal in the sense of reconstituting the award. The permissible path under S.34(4) is to adjourn the proceedings to enable the Arbitral Tribunal to resume or take appropriate action to eliminate grounds for setting aside, not to remand for recording reasons in the award.
Final Disposition: Not explicitly stated in the excerpt; the court analyzes the legal propriety of remand under S.34(4) and appears to reject remand in favor of adjournment to allow corrective action by the Arbitral Tribunal.

Parties to the Case

Appellants / Petitioners

Kinnari Mullick and Another

Respondents

Ghanshyam Das Damani

Case Synopsis & Summary

This Arb.A.No.24 of 2019 pertains to a dispute arising from an Arbitral Tribunal award concerning Kinnari Mullick and another (the appellants) and Ghanshyam Das Damani (the respondent). The award dated 18.06.2013, as confirmed in later proceedings, directed the appellants to execute deeds as proposed by the respondent and to bear costs, but was criticised for lacking reasons. The appellants challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996, arguing that the absence of reasons invalidates the award and warrants setting aside. The learned Single Judge agreed, setting aside the award on grounds of non-reasoned conclusions. The Respondent contended that the court may remand the matter to the Arbitral Tribunal to eliminate the grounds for setting aside under S.34(4) and asserted that there was no jurisdictional error in the Division Bench’s approach to send the award back for reasons. The Division Bench, while affirming the Single Judge in part, directed that the award be remanded for reasons, a step which the present Court scrutinizes under S.34(4). The core issue is whether the court can remand to the arbitral tribunal, or only adjourn to permit the tribunal to resume proceedings or take corrective actions to eliminate grounds for setting aside. The judgment concludes by analyzing the permissible use of S.34(4) and emphasizing that remand, as such, is not contemplated; instead, adjournment to enable corrective steps is proper.

Provisions of Law Cited

Section 34 of the Arbitration and Conciliation Act, 1996S.34(4) of the Act

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellants argued that the arbitral award was impermissible for lack of reasons, rendering it liable to be set aside under S.34, and that the remedy lies in quashing the award rather than remanding for reasons. They contended that the court must enforce statutory requirements for reasoned awards and that remanding for reasons should not be used to salvage a non-reasoned award.

Contentions of Respondents

The respondent contended that the court has power under S.34(4) to adjourn and remand to the Arbitral Tribunal to eliminate grounds for setting aside by enabling the tribunal to resume proceedings or take actions to cure deficiencies; they argued there was no jurisdictional error in the Division Bench’s approach and that rectifying the deficiencies by remand would be appropriate.

Cited Precedents (3)

Case Name	Citation	Treatment	Explanation
Ghanshyam Das Damani	2018 (11) SCC 328	Mentioned Only	Cited in the title/footnotes as a reference; the excerpt does not show it being applied as a controlling authority in the decision.
McDermott International Inc.	Supra	Positive	Cited to support the proposition that the court does not have power to remand to the arbitral tribunal, except to adjourn under S.34(4).
Kinnari Mullick	Supra	Mentioned Only	Cited with supra notation; used as a background reference rather than as a binding controlling authority in the decision.

Extracted Judgment Text

Exact text extracted from official judgment records.

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( ��, ��, ��) ��#�� ( �) ��$ - $ �� $�� $ �� $/ $�� **Arb.A.No.24 OF 2019 4** ��+��, ��+�� 0��1$2$/ �$344��%556$�� - . ��$ . $ �� $�� * �� $� 7$ 8�� $�� &�� |**Arb.A.No.24 OF 2019 5**| |---| |&| |&| |+, +| |0$| |* $| |4$ 9| |&| |&| |%554$| |%3: 53: %55-| |& 3| |$&| |$2$; $ ; &| **Arb.A.No.24 OF 2019 6** �� 2�� # ��$�$/ ��<�� &�� $; $�� 8�� &�� 1�� $� =$ ��&�� 3 2�� $2$; $�� ; ��$�$/ ��<�� $��>�� 2��* �� - ��$ ?$ ��+��, ��+��0�� 1$2$/ �$344 ��%556 �� **Arb.A.No.24 OF 2019 7** |57: 5?: %55? ! &| |---| |$2$; $| |; !| |& $| |%556 +,| |+0*| |%- : 5%: %537| |# &| |, ,| |2$2$; $; $| |6$ &| |0+| |" <| |@27 4 35| |3- ’ !| ## **Arb.A.No.24 OF 2019 8** 5. The appellants then received a copy of the purported award dated 18.06.2013 passed by the Arbitral Tribunal. The arbitrator allowed the claim of the Respondent and directed the Appellants to execute and register appropriate deed and / or deeds as proposed by the Respondent vide its Advocate's letter dated 29.06.2009; and further directed that conveyance and / or conveyances was / were to be executed and registered by the appellants, costs and expenses thereof were to be borne by the Respondent within a period of 30 days from the date of the award irrespective of any intervening holiday and / or holidays. The said award, however, did not contain any reason for allowing the claim of the Respondent. 6. Being dissatisfied with the interim award dated 27.08.2010 and final award dated 18.06.2013 passed by the Arbitral Tribunal, the Appellants filed an application under S.34 of the Act, for setting aside of the said awards. The learned Single Judge was pleased to allow the said application on the finding that the impugned award did not disclose any reason in support thereof. The impugned award was accordingly set aside and the parties were left to pursue their remedies in accordance with law. The relevant portion of the decision of the learned Single Judge reads thus: “Since the present award is completely lacking in reasons and is littered with the unacceptable expressions like “I feel that the claim is justified” “I find no basis” and the like which cannot be supplement for reasons that the statute demand, A.P.No.1074 of 2013 is allowed by setting aside the award dated June 18, 2013. The parties are left free to pursue their remedies in accordance with law.” 10. The Respondent, on the other hand, submits that ample power is bestowed upon the Court to relegate the parties to the award under challenge back to the ## **Arb.A.No.24 OF 2019 9** Arbitral Tribunal to eliminate the ground for setting aside of the arbitral award, in terms f S.34 of the Act. It is submitted that no jurisdictional error has been committed by the Division Bench in exercising that power for sending the award back to the Arbitral Tribunal with a direction to assign reasons in support of the award. It is submitted that the dismissal of the appeal preferred by the Respondent against the judgment of the learned Single Judge will not come in the way of the Respondent muchless to participate in he proceedings before the Arbitral Tribunal as has been remitted by the Division Bench for the limited purpose of assigning reasons in support of the award. It is submitted that no interference is warranted with the concluding part of the judgment of the division bench which intends to facilitate rectification of the deficiencies in the award already pronounced by the Arbitral Tribunal. 11. We have heard the learned counsel for the parties. At the outset, we may note that, if the plea taken by the Appellants in relation to the concluding part of the impugned judgment – of sending the award back to the Arbitral Tribunal for recording reasons – was to be accepted, we may not be required to dilate on any other argument. Inasmuch as the learned single Judge allowed the application under S.34 of the Act for setting aside of the award preferred by the appellants; and the Division Bench has already affirmed the conclusion recorded by the learned Single Judge while dismissing the appeal preferred by the Respondent has not challenged that part of the impugned judgment and has allowed it to become final. 12. In this backdrop, the question which arises is: whether the highlighted portion in the operative part of the impugned judgment of the Division Bench can be sustained in law? For that, we may advert to S.34(4) of the Act which is the ## **Arb.A.No.24 OF 2019 10** repository of power invested in the Court. The same reads thus: “S.34....(4). On receipt of an application under sub-section(1), the court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.” 13. On a bare reading of this provision, it is amply clear that the Court can defer the hearing of the application filed under S.34 for setting aside the award on a written request made by a party to the arbitration proceedings to facilitate the Arbitral Tribunal by resuming the arbitral proceedings or to take such other action as in the opinion of Arbitral Tribunal will eliminate the grounds for setting aside the arbitral award. The quintessence for exercising power under this provision is that the arbitral award has not been set aside. Further, the challenge to 'the said award has been set up under S.34 about he deficiencies in the arbitral award which may be curable by allowing the Arbitral Tribunal to take such measures which can eliminate the grounds for setting aside the arbitral award. No power has been invested by the Parliament in the Court to remand the matter to the Arbitral Tribunal except to adjourn the proceedings for the limited purpose mentioned in sub-S.4 of S.34. This legal position has been expounded in the case of McDermott International Inc. (supra). In paragraph 8 of the said decision, the Court observed thus: “8....parliament has not conferred any power of remand to the Court to remit the matter to the arbitral tribunal except to adjourn the proceedings as provided under sub-section (41 of S.34 of the Act. The object of sub-section (4) of S.34 of the Act is to give an opportunity to the arbitral tribunal to ## **Arb.A.No.24 OF 2019 11** resume the arbitral proceedings or to enable it to take such other action which will eliminate the grounds for setting aside the arbitral award.” 35$ ��" ��* �� +��, ��+��0�� 35: 56: %537 �� %7: 56: %537 ��@��%$ ��$ 33$ ��&� ��* ��+��, +��0�� &�� , ��, ��2�� $2$; $��; **Arb.A.No.24 OF 2019 12** |$| |---| |3%$ @| |$| |&| |&| |, ,| |2$2$; $; $| |3- $| |&| |"| |&<| |- .| |&| **Arb.A.No.24 OF 2019 13** ��0��+�� $� 3. $ 9�� 2�� $2$; $��; ��$�� &�� 2�� $2$; $��; ��&�� $ �� 2�� &��$ 37$ **Arb.A.No.24 OF 2019 14** ��2�� $2$; $��; ��&��$ �� ! ��$�$/ ��$666 ��%53= �36=5 �� %53=��36=3 ��%53=�! ��<�� &�� 2��$2$; $��; �� &�� $�� $�� $ 34$ ��&�� **Arb.A.No.24 OF 2019 15** ��2�� $2$; $��; ��&�� $� 3=$ 9�� &�� %7: 56: %537 ��2��$ �+��&�� &�� 2�� $ 3?$ A�� @�� " �� &�� **Arb.A.No.24 OF 2019 16** ��&�� &�� , ��, ��+��, +��0��$ 36$ 9�� 2�� $ %5$ �� $2$; $��; 34: 5%: %554�� 3. : 5=: %55? ��$2$; $�� ; ��$�� >��$ ��&��&� �� 0��+�� **Arb.A.No.24 OF 2019 17** ��&��$ �� &��$�� +��, ��+�� 0�� 2�� &��$�� >�� $B�&�<��$�� %3$ ��" �� * �� &��+��, ��0��+�� $�� $0��8��C�� $ ��&�� $/ ��<�� $B�&�< ��$0��8��C��$ �1�&�� 34: 5%: %554�� &�� 2��$/ ��<�� $��<�� 2�� ## **Arb.A.No.24 OF 2019 18** ��34: 5%: %554$�� %%$ 0�� &�� _'pronounce the Award prepared by the Arbitrators Shri.P.K.Sanal Kumar, Shri.R.Nandakumar and Shri.K.Ramadoss as directed by the Hon'ble High Court of Madras within two weeks from the date of this order' (sic)_ $ ��" �� @�� $�$/ ��<�� &�� , ��, 2�� $��@�� $�$/ ��<�� &��$ **Arb.A.No.24 OF 2019 19** %- $ �� " �� &� , ��, _res novo_ ��&�� * ��+��, _**Kinnari Mullick**_ **(Supra),** ��&�� 2��$�� &�� # �� $ %. $ A��* �� " �� $�9�� &�� &�� #�� **Arb.A.No.24 OF 2019 20** ��$�+��&�� &�� $�� %7$ �� &�� <��&�� &��$ ��! 1$2( ��) / �$77��%534#��" �� <�� &�� &�� **Arb.A.No.24 OF 2019 21** �� @��$� ��&�� &�� &�� ! ��D�� $�� &�� " �� &�� * �� " �� &�� &��$�� @�� **Arb.A.No.24 OF 2019 22** ��* �� < �� 3?: 5?: %5%5$�� <�� &��$ ��! ��E��$�� **Sd/DEVAN RAMACHANDRAN JUDGE MC/23.7.2020** **Arb.A.No.24 OF 2019 23** ## **APPENDIX** **PETITIONER'S/S EXHIBITS:** **ANNEXURE A1 A TRUE COPY OF THE ORDER OF THE HON'BLE HIGH COURT OF MADRAS DATED 23.02.2015 IN O.P.NO.166/2009. ANNEXURE A2 A TRUE COPY OF THE AWARD DATED 25.09.2015 PASSED BY THE ARBITRAL TRIBUNAL. ANNEXURE A3 A TRUE COPY OF THE ORDER PASSED IN O.P. (ARB)NO.55/2016 ON THE FILE OF THE DISTRICT JUDGE, THALASSERY AND DATED 24TH NOVEMBER 2018.** **RESPONDENT'S/S EXHIBITS:** ## **NIL** **MC** **(TRUE COPY) PA TO JUDGE**