Section 31(2) clarified: Dissent as sufficient "reason" for omitted signature and validity of separate signed concurrence — Orind Special Refractories Ltd v. Rashtriya Ispat Nigam Ltd (AP High Court, 11 Sep 2025)

Section 31(2) clarified: Dissent as sufficient "reason" for omitted signature and validity of separate signed concurrence — Orind Special Refractories Ltd v. Rashtriya Ispat Nigam Ltd (AP High Court, 11 Sep 2025)

Introduction

In this International Commercial Arbitration Appeal No. 1 of 2025, a Division Bench of the Andhra Pradesh High Court (Hon’ble Sri Justice Ravi Nath Tilhari and Hon’ble Sri Justice Maheswara Rao Kuncheam) addressed a recurring procedural challenge to arbitral awards under Section 31(1) and (2) of the Arbitration and Conciliation Act, 1996 (the Act). The appellant, M/s Orind Special Refractories Ltd (a Chinese company), had supplied ladles to the respondent, M/s Rashtriya Ispat Nigam Ltd (RINL, Visakhapatnam Steel Plant), under a contract. Disputes arose over liquidated damages for delayed supply and exchange rate application.

An arbitral tribunal of three members rendered a majority award dated 02.06.2017 (Presiding Arbitrator T.V.B. Haranath with concurring Co-Arbitrator Justice N.R.L. Nageswara Rao (Retd.)) awarding limited sums to the claimant, and a signed dissent by Co-Arbitrator Justice S.S. Parkar (Retd.) granting far larger reliefs. Orind’s Section 34 challenge (ICOMAOA No. 4 of 2018) was dismissed by a Single Judge on 27.08.2024. In Section 37 appeal, Orind focused narrowly on one point: the alleged invalidity of the award for non-compliance with Section 31(1)-(2) because the “majority award” was not signed by all arbitrators and did not state reasons for omitted signatures.

The central issue: whether a majority award remains valid when (a) the Presiding Arbitrator issues a reasoned award signed by him, (b) a co-arbitrator issues a separate signed concurrence (even if cryptic and undated near the signature), and (c) the third arbitrator issues and signs a separate dissent — without the “majority award” itself narrating a reason for the third arbitrator’s omitted signature thereon.

Summary of the Judgment

  • The appeal was dismissed with costs of Rs. 1,00,000 payable to the Andhra Pradesh High Court Legal Services Committee.
  • The Court held there was no violation of Section 31(1)-(2) of the Act. The Presiding Arbitrator’s reasoned award was signed; the concurring Co-Arbitrator issued and signed a separate concurrence; and the third arbitrator signed a dissenting award. Together, this satisfied the signature and “omitted signature reason” requirements.
  • The Court clarified that where a dissent is issued and signed, that dissent itself constitutes the reason for the absence of that arbitrator’s signature on the majority award; no additional “reason statement” within the majority document is needed.
  • The absence of a handwritten date next to the concurring arbitrator’s signature did not vitiate the award, as the award booklet clearly bore the date and the concurring note was transmitted as part of the same compilation and email dated 02.06.2017.
  • The Single Judge had considered the Section 31 argument (even though it was not raised in the Section 34 pleadings) and the key precedents; the contrary assertion was rejected.
  • The Court distinguished decisions where an award lacked a signature with no dissent and no reason for omission and aligned with Delhi High Court precedent permitting separate signed concurrences.

Analysis

Statutory and Institutional Framework

  • Section 31(1) mandates that an arbitral award shall be in writing and signed by the members of the tribunal.
  • Section 31(2) provides that, in multi-member tribunals, signatures of the majority suffice “so long as the reason for any omitted signature is stated.”
  • The Court reiterates the distinction between “making” (authentication by signatures) and “delivery” of the award (Dakshin Haryana Bijli Vitran Nigam Ltd v. Navigant Technologies (2021) 7 SCC 657).
  • ICA Rules (Rule 26(1)-(2), (12), (14); Definitions 2(b), (n), (o)) mirror Section 31 and provide for signing and delivery via the institution’s Registrar. The tribunal here forwarded a single compiled booklet by email to the ICA Registrar on 02.06.2017, enclosing:
    • Presiding Arbitrator’s reasoned award (signed, dated 02.06.2017),
    • Co-Arbitrator Justice N.R.L. Nageswara Rao’s signed concurrence, and
    • Co-Arbitrator Justice S.S. Parkar’s signed dissent (dated 31.05.2017).

Precedents Cited and Their Influence

  • Supreme Court: Dakshin Haryana Bijli Vitran Nigam Ltd v. Navigant Technologies ((2021) 7 SCC 657)
    • Authority: Section 31(1) is mandatory; an award becomes legally effective only upon being signed by arbitrators. Making vs delivery are distinct stages. The word “shall” underscores signature as an essential authentication act, not a mere formality.
    • Impact here: The Bench applied this to confirm that authentication existed via signatures: Presiding Arbitrator’s signed award, a signed concurrence, and a signed dissent.
  • AP High Court (DB): Transmission Corporation of Andhra Pradesh Ltd v. Galada Power & Telecommunication Ltd (2007 (1) ALT 515)
    • Authority: If not all sign, the majority must sign and the award should record the reason for any omitted signature.
    • Impact here: The Bench accepts this principle but clarifies its application: a signed dissent is itself the reason for omission, making a further “reason recital” in the majority document unnecessary.
  • Delhi High Court: Medeor Hospital Ltd v. Ernst & Young LLP (2023 SCC OnLine Del 2477)
    • Authority: A cryptic concurrence suffices; a presiding arbitrator’s separate opinion does not invalidate a majority award if two arbitrators signed the majority. A dissent issued separately explains the omitted signature.
    • Impact here: The Bench expressly relies on Medeor to uphold the separate signed concurrence and to treat a signed dissent as the implicit reason under Section 31(2).
  • Delhi High Court: Mahanagar Telephone Nigam Ltd v. Siemens Public Communication Network Ltd (2005 SCC OnLine Del 237)
    • Authority: Where an award bears only two signatures and states no reason for omission of the third—and no separate dissent exists—the award is invalid.
    • Distinguished: In the present case there was a signed dissent; hence the factual matrix is different and Section 31(2) stands satisfied.
  • Delhi High Court: ISC Projects Pvt Ltd v. Steel Authority of India Ltd (2025 SCC OnLine Del 1133)
    • Authority: Invalid award where one arbitrator’s signature is missing, no reason for omission is recorded, and no dissent is issued.
    • Distinguished: Here, a signed dissent existed; therefore, the defect in ISC Projects is absent.

Court’s Legal Reasoning

  • Mandatory nature of signatures (Section 31(1)): The Court reaffirms that signatures authenticate the award and confer legal effect; this is not a procedural nicety.
  • How Section 31(2) is satisfied in multi-member tribunals:
    • Majority signatures suffice. Crucially, the majority may authenticate either by signing one and the same document or by signing separate instruments — e.g., a reasoned award by one arbitrator and a separate signed concurrence by another.
    • If a third arbitrator declines to sign the majority award because he has issued a dissent, the signed dissent is the “reason” for omitted signature contemplated by Section 31(2). No further recital is required in the majority award.
  • Cryptic concurrence is adequate: A concurring arbitrator may issue a short note stating agreement with the reasons and conclusions of the main award; such a concurrence, if signed, validly expresses assent and counts towards the majority.
  • Absence of a handwritten date near the concurrence signature does not vitiate the award: Where the award bundle is dated (02.06.2017), transmitted together by the Presiding Arbitrator’s email on that date, and the concurring note refers to the very proceedings, the lack of a signature-date annotation is not fatal.
  • Record-based findings:
    • The Court relied on materials (Annexures P16/P17) showing the Presiding Arbitrator emailed the compiled booklet to ICA on 02.06.2017 containing the signed majority award, the signed concurrence, and the signed dissent. The minority opinion itself bore the date 31.05.2017.
    • The appellant’s earlier photocopy of the dissent lacked visible signatures; the Court noted this deficiency and that a complete signed dissent was later filed by memo. It criticized the appellant’s mischaracterization of the Single Judge’s observations on copying/scanning quality, clarifying they pertained to the dissent, not the majority award.
  • Scope under Sections 34/37 and Single Judge’s handling:
    • Even though the Section 31 ground was not pleaded under Section 34, the Single Judge considered it and cited Dakshin Haryana, MTNL, and A.P. Transco. The Division Bench found this to be adequate and correct.
    • No other substantive grounds against the award were pursued in the appeal; the attack was purely procedural.

Impact and Implications

This judgment offers valuable, practice-oriented clarity on signature compliance for multi-member tribunals, especially in institutional arbitrations:

  • Separate signed concurrence is sufficient: A co-arbitrator need not co-sign every page of the presiding arbitrator’s award; a short, signed concurrence suffices to form the majority.
  • Dissent as implicit “reason” under Section 31(2): When an arbitrator issues and signs a dissent, the law does not require the majority award to state, again, a “reason” for the dissenting arbitrator’s omission to sign the majority document; the dissent itself is the reason.
  • Form over formality: Minor formal defects — like the absence of a handwritten date next to a signature — will not invalidate an award where the award booklet is dated and contemporaneously transmitted by the tribunal or the institution.
  • Reduced technical challenges under Section 34/37: This decision narrows the avenue for set-aside petitions that rely on hyper-technical objections to signatures when the record transparently shows a signed majority and a signed dissent.
  • Alignment with institutional rules: The approach harmonizes Section 31 with ICA Rules, promoting predictable, efficient award-making and transmission practices.

Practical Guidance for Arbitrators and Counsel

  • For tribunals:
    • If one arbitrator authors the reasoned award, a co-arbitrator may issue a succinct signed concurrence referencing agreement with reasons and conclusions.
    • If an arbitrator dissents, issue and sign a separate dissent. That signed dissent will inherently explain the omitted signature on the majority award.
    • Compile all instruments (majority award, concurrences, dissent) in one dated award booklet and transmit through the institution (or directly in ad hoc cases), ensuring Section 31(5) delivery.
  • For counsel:
    • When challenging awards, verify the complete record—including institutional transmission emails and certified copies—before alleging signature defects.
    • Recognize that cryptic concurrences and separate dissents are valid forms of authenticating majority decisions.
    • Reserve Section 31 objections for genuine cases where a signature is missing, there is no separate dissent, and no reason for omission is recorded.

Complex Concepts Simplified

  • Arbitral award “making” vs “delivery”: An award is “made” when the tribunal’s decision is reduced to writing and authenticated by signatures; it is “delivered” when a signed copy is provided to parties (often via the institution).
  • Majority award (Section 29): In a three-member tribunal, any decision can be by two arbitrators forming a majority.
  • Signed concurrence: A short, separate document where a co-arbitrator records agreement with the main award’s reasoning and conclusion; it counts as the arbitrator’s signature for Section 31 purposes.
  • Dissenting opinion: A separate award/opinion by an arbitrator who disagrees with the majority; if signed, it simultaneously authenticates the arbitrator’s stance and serves as the reason for not signing the majority document.
  • Reason for omitted signature (Section 31(2)): A statutory safeguard ensuring transparency. Where a dissent exists, the dissent itself is treated as the reason.
  • Liquidated damages: A pre-estimated sum stipulated in the contract payable on breach (e.g., delayed delivery) without proof of actual loss, subject to legal limitations.
  • Section 34 and Section 37: Section 34 is for setting aside an award (limited grounds; not an appeal on merits). Section 37 provides appellate review of orders under Section 34 (also limited).

Conclusion

The Andhra Pradesh High Court’s decision in M/s Orind Special Refractories Ltd v. M/s Rashtriya Ispat Nigam Ltd sharpens and streamlines the application of Section 31(1)-(2) of the Arbitration and Conciliation Act, 1996. It establishes that:

  • A majority award is valid when one arbitrator issues a signed reasoned award, another issues and signs a separate concurrence (even if brief), and the third issues and signs a dissent.
  • A signed dissent is, in itself, the “reason” for the omitted signature on the majority award; no separate narration is necessary within the majority document.
  • Minor formal lapses, such as an absent handwritten date next to a signature, will not nullify an otherwise properly authenticated award, especially when institutional transmission evidences contemporaneous making and delivery.

By aligning with Supreme Court authority and practical Delhi High Court precedent (Medeor), and distinguishing decisions where neither reason nor dissent existed, the Bench has reduced scope for technical set-aside petitions and strengthened confidence in institutional arbitration processes. The imposition of costs underscores a judicial disinclination to entertain meritless procedural attacks premised on incomplete or mischaracterized records. Practically, the ruling offers a clear checklist for tribunals and counsel to ensure unimpeachable compliance with Section 31 going forward.

Case Details

Year: 2025
Court: Andhra Pradesh High Court

Advocates

Comments