Section 31(2) of the Arbitration and Conciliation Act, 1996: Signature Requirements for Multi-Member Arbitral Awards in India

Section 31(2) of the Arbitration and Conciliation Act, 1996: Signature Requirements for Multi-Member Arbitral Awards in India

1 . Introduction

The enforceability of an arbitral award depends not only on substantive correctness but also on strict compliance with statutory form. Section 31 of the Arbitration and Conciliation Act, 1996 (“the 1996 Act”) codifies the minimum formal requirements, among which sub-section (2) mandates that, where the arbitral tribunal comprises more than one arbitrator, “the signatures of the majority of all the members of the arbitral tribunal shall be sufficient so long as the reason for any omitted signature is stated.” Non-compliance exposes the award to annulment under Section 34(2)(a)(v).

2 . Statutory Framework

2.1 Text and Placement of Section 31(2)

Section 31 as a whole governs form and contents, allocation of costs, interest, delivery of awards and corrections. Sub-section (2) draws from Article 31(2) of the UNCITRAL Model Law, underscoring India’s legislative preference for certainty and speed in enforcement.

2.2 Mandatory Character

Unlike Section 10 (number of arbitrators) held derogable in Narayan Prasad Lohia v. Nikunj Kumar Lohia (2002)[1], Section 31(2) is widely considered non-derogable. Party autonomy may permit deviation from many procedural norms, but the signature requirement safeguards the integrity of collective decision-making and therefore goes to the “very root of the award.”

3 . Judicial Interpretation of Section 31(2)

3.1 Ashesh Busa v. Atul Gandhi (Bombay HC 2019)

A three-member tribunal delivered an award signed by only two arbitrators; the missing signature was unexplained. The High Court set the award aside, holding that the absence of reasons for the omitted signature violated Section 31(2), constituting a procedural irregularity under Section 34(2)(a)(v). The Court rejected arguments that post-award e-mail correspondence could cure the defect.[2]

3.2 M/S ISC Projects Pvt Ltd v. Steel Authority of India Ltd (Delhi HC 2025)

The Delhi High Court reiterated that Section 31(2) demands not a “mechanical recital” but an adequate and germane reason for the missing signature of a tribunal member. Absence of such explanation “undermines the validity of the award.”[3]

3.3 Earlier Authority and Comparative Overview

Although no Supreme Court pronouncement squarely on Section 31(2) exists, dicta in Jain Studios Ltd v. Shin Satellite Public Co. (2006) emphasise faithfulness to UNCITRAL norms in matters of tribunal composition, supporting the mandatory reading.[4]

4 . Interaction with Other Provisions of the 1996 Act

4.1 Section 34 — Annulment for Procedural Violations

Section 34(2)(a)(v) allows courts to set aside an award if “the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties unless such agreement conflicts with a non-derogable provision of this Part.” Because Section 31(2) is non-derogable, any agreement purporting to dispense with signatures or reasons is void.

4.2 Section 29A and 29B — Expedited Timelines

Expedited or fast-track proceedings under Sections 29A–29B do not dilute Section 31(2). Tribunals must factor signature logistics into statutory timelines rather than abbreviate the requirement.

4.3 Section 31(4) and Jurisdictional Exclusivity

Section 31(4), interpreted in Ramchander v. Munshi (Patna HC 1949) and successive cases, consolidates jurisdiction in the court first seised. Challenges invoking Section 31(2) must thus be filed before the court where the award is or may be filed.[5]

5 . Comparative Doctrinal Insights

  • UNCITRAL Model Law: Article 31(2) mirrors Section 31(2), but international practice usually tolerates a missing signature if the reason is documented contemporaneously. Indian courts, as seen above, require such recording within the award itself.
  • English Arbitration Act 1996: Section 52(3) contains a similar majority-signature rule but allows the tribunal to notify parties separately of dissent, demonstrating a more flexible approach.

6 . Interface with Public Policy and Patent Illegality

In ONGC v. Saw Pipes Ltd. (2003) the Supreme Court broadened “public policy” under Section 34 to include “patent illegality.” An award in breach of Section 31(2) is patently illegal and therefore unenforceable, reinforcing the mandatory nature of the subsection.[6]

7 . Derogability vs Non-Derogability: A Normative Rationale

While Section 10 was deemed derogable to foster party autonomy (Narayan Prasad Lohia), Section 31(2) serves systemic interests: transparency, accountability of dissent, and prevention of covert deliberations. These objectives justify its non-derogable status. The proviso permitting majority signatures balances efficiency with due process.

8 . Practical Implications and Best Practices

  • Drafting Stage: Provide clear procedural timelines for signing, including use of electronic signatures compliant with the Information Technology Act 2000.
  • Deliberation Stage: Ensure dissenting arbitrators communicate reasons for non-signature in writing, annexed to the award.
  • Institutional Rules: Institutions should incorporate explicit protocols mirroring Section 31(2) to avoid inadvertent non-compliance.
  • Judicial Scrutiny: Parties challenging awards should marshal evidence swiftly, mindful of the jurisdictional funnel created by Section 31(4) as interpreted in Milkfood (P) Ltd v. GMC Ice Cream (P) Ltd. (2011).

9 . Conclusion

Section 31(2) is a seemingly modest procedural clause with significant ramifications for the legitimacy of arbitral awards in India. Judicial decisions—including Ashesh Busa and ISC Projects—demonstrate that courts will not hesitate to annul awards where the signature requirement is unmet or the reason for an omitted signature is inadequately recorded. Given the pro-arbitration policy affirmed in cases such as BSNL v. Motorola (2009) and J.G Engineers (2011), strict adherence to Section 31(2) is indispensable for parties seeking swift and conclusive dispute resolution. Meticulous compliance not only insulates awards from challenge but also reinforces confidence in India’s arbitral regime.

Footnotes

  1. Narayan Prasad Lohia v. Nikunj Kumar Lohia, (2002) 3 SCC 572 (holding Section 10 derogable when read with Section 16).
  2. Ashesh Busa v. Atul Gandhi, 2019 SCC OnLine Bom 1102 (Bombay HC) (award set aside for violation of Section 31(2)).
  3. M/S ISC Projects Pvt Ltd v. Steel Authority of India Ltd., 2025 Del HC (unreported at the time of writing).
  4. Jain Studios Ltd. v. Shin Satellite Public Co. Ltd., (2006) 5 SCC 501.
  5. Ramchander v. Munshi, AIR 1950 Pat 380; Milkfood (P) Ltd. v. GMC Ice Cream (P) Ltd., (2011) 11 SCC 573.
  6. Oil & Natural Gas Corporation Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705.