The purpose of Section 31(2) of the Arbitration and Conciliation Act 1996 is to ensure that the absence of minority members of tribunals do not lead to any fresh litigation.

The Hon’ble High Court of Delhi held that where an award has been signed by the majority of the members of the arbitral tribunal, such an award will be an award of the arbitral tribunal, irrespective of minority members not signing the same.

The same was held in the matter of M/s Chandok Machineries Vs. M/s S.N. Sunderson and Co., FAO(OS) 268/2018 on 10.12.2018.

Challenge

The only limited issue in the present suit was whether the arbitral award dated 12.06.2016, passed by a three-member arbitral tribunal, is liable to be set aside.

In the present case, the principal ground of the appellant was that the mandate of the Tribunal having terminated on 13.06.2017, hence the award which was signed by the third arbitrator on 28.06.2017 was non est.

Held

The Hon’ble High Court of Delhi rejected the contentions of the appellant and held that the substantive decisions of an arbitral tribunal under Section 29(1) of the Act of 1996 clearly provides that an award made by the majority of the members of the tribunal prevails. It was also observed that although section 31(1) requires the award to be signed by the members of the tribunal, however section 31(2) provides for a contingency where an award is not signed by all the members of the tribunal, but only by the majority thereof.

It was further held that the general rule as prescribed under Section 31 of the Act of 1996 is more in the nature of procedural safeguard and procedural irregularity of this nature ought not to vitiate the entire decision-making process, particularly when it is capable of being cured.

The above conclusion was in the light of the decision of the Hon’ble High Court of Bombay in Moti Vs. Sheroo (2009) 6 Maharasthra Law Journal 535.