Court’s Decision
The Andhra Pradesh High Court, in a significant pronouncement by Justice Ravi Nath Tilhari and Justice Maheswara Rao Kuncheam, dismissed an international commercial arbitration appeal challenging the validity of an arbitral award on the ground that it was not signed by all arbitrators.
The Division Bench held that an award signed by the majority of arbitrators, where dissenting opinions are separately recorded and signed, meets the statutory mandate under Section 31(1) and (2) of the Arbitration and Conciliation Act, 1996.
Reiterating the sanctity of procedural compliance, the Court observed:
“Signing of the award is not a merely ministerial act or an empty formality which can be dispensed with. It gives authentication and legal effect to the award.”
The Bench upheld the judgment of the learned Single Judge dated 27 August 2024, which had dismissed the Section 34 petition, and further imposed ₹1,00,000 costs on the appellant for filing a misconceived.
Facts
The appellant, a China-based manufacturer of refractories, entered into a contract with an Indian steel manufacturer for the supply of 260 ladles containing imported and indigenous materials. Disputes arose over delayed deliveries and calculation of exchange rates, leading the respondent to deduct USD 159,638.50 and ₹15.72 lakh towards liquidated damages and a further ₹4.18 crore as penalty for underperformance.
The appellant invoked the arbitration clause after the respondent refused to release payments. The Arbitral Tribunal, comprising three members — a Presiding Arbitrator and two Co-Arbitrators — delivered a majority award in June 2017. The majority (two arbitrators) awarded the claimant a nominal sum of USD 21,837 and ₹2,12,268 with 12% interest, rejecting the major portion of the claims.
A minority opinion by the third arbitrator, however, directed payment of USD 159,638.50, ₹15.72 lakh, and ₹12.75 lakh for exchange fluctuation, holding that deductions were unlawful.
The appellant challenged the majority award under Section 34, alleging that the award was invalid as it was not signed by all arbitrators. The Single Judge dismissed the petition. The appellant then filed the present Section 37 appeal, reiterating that the omission of signatures rendered the award void.
Issues
- Whether the arbitral award, not signed by all arbitrators, violates Section 31(1) and (2) of the Arbitration Act.
- Whether the omission of reasons for missing signatures invalidates the award.
- Whether the learned Single Judge erred in upholding the majority award despite alleged procedural lapses.
Petitioner’s Arguments
The appellant argued that the majority award was void since it lacked the signatures of all arbitrators and did not mention reasons for omitted signatures, violating Section 31(1) and (2) of the Act. The appellant claimed that the Co-Arbitrator who concurred did not sign the main award, and that the reasons for such omission were not recorded.
It was further contended that an unsigned award has no legal existence, citing judgments in Transmission Corporation of Andhra Pradesh Ltd. v. Galada Power and Telecommunication Ltd. (2007 (1) ALT 515), Dakshin Haryana Bijli Vitran Nigam Ltd. v. Navigant Technologies Pvt. Ltd. ((2021) 7 SCC 657), and Mahanagar Telephone Nigam Ltd. v. Siemens Public Communication Network Ltd. (2005 SCC OnLine Del 237).
The appellant argued that the Single Judge wrongly presumed that non-signature might be due to “ink or photocopying issues,” and failed to appreciate that the absence of a signature cannot be presumed or overlooked, as it strikes at the award’s validity.
Respondent’s Arguments
The respondent refuted the claims, asserting that all three arbitrators had duly signed their respective awards — the Presiding Arbitrator authored and signed the main award; the second Co-Arbitrator signed a separate concurring award agreeing with the Presiding Arbitrator’s reasoning; and the third Co-Arbitrator signed a dissenting opinion.
It was submitted that the absence of a common signature page does not invalidate the award as long as the arbitrators sign their respective opinions. Reliance was placed on Medeor Hospital Ltd. v. Ernst and Young LLP (2023 SCC OnLine Del 2477), where the Delhi High Court held that a majority award signed by concurring arbitrators separately remains valid.
The respondent emphasized that the Section 31 requirement was fully complied with, and that the appeal was frivolous and meant to delay enforcement.
Analysis of the Law
Section 31 of the Arbitration and Conciliation Act, 1996 mandates that an arbitral award:
- must be in writing and signed by members of the Tribunal (sub-section 1); and
- signatures of the majority are sufficient so long as the reason for any omitted signature is stated (sub-section 2).
The Court held that the purpose of Section 31 is to ensure authenticity and prevent post-facto disputes. The law recognizes that an arbitral tribunal may have dissenting opinions, and such dissent itself constitutes the reason for omission.
Referring to Dakshin Haryana Bijli Vitran Nigam Ltd. (2021) 7 SCC 657, the Bench reiterated:
“An award takes legal effect only after it is signed by the arbitrators, which gives it authentication. There can be no finality of the award except after it is signed.”
Similarly, in Transmission Corporation of Andhra Pradesh Ltd. (2007 (1) ALT 515), the High Court held that absence of reasons for missing signatures renders an award invalid, while Medeor Hospital Ltd. clarified that concurring awards separately signed are validdisplay-621303.
The Bench harmonized these rulings to hold that where:
- the majority of arbitrators sign their respective concurring awards, and
- the dissenting arbitrator records a signed minority opinion,
the statutory requirements are satisfied, even if all signatures do not appear on a single document.
Precedent Analysis
- Dakshin Haryana Bijli Vitran Nigam Ltd. (2021) 7 SCC 657 – Signing of award is mandatory; unsigned awards lack validity.
- Transmission Corporation of A.P. Ltd. v. Galada Power (2007 (1) ALT 515) – Absence of reasons for omission of signature invalidates award.
- Mahanagar Telephone Nigam Ltd. (2005 SCC OnLine Del 237) – Document not signed by one arbitrator without explanation is not an award.
- ISC Projects Pvt. Ltd. v. SAIL (2025 SCC OnLine Del 1133) – Violation of Section 31(2) when no reason is stated for omitted signature.
- Medeor Hospital Ltd. v. Ernst & Young LLP (2023 SCC OnLine Del 2477) – Separate signed concurring and dissenting opinions satisfy Section 31(2).
The present Bench applied Medeor Hospital to affirm that signed concurring and dissenting opinions form a valid majority award, distinguishing earlier cases where reasons were entirely absentdisplay-621303.
Court’s Reasoning
The Bench found no violation of Section 31. The Presiding Arbitrator signed his award, the second Co-Arbitrator signed a separate concurring note, and the third Co-Arbitrator signed a dissenting opinion. All three were compiled and transmitted together to the Indian Council of Arbitration.
The Court noted that the appellant itself produced these documents later through a memo, confirming the presence of all signatures. Hence, the contention of omission was factually incorrect.
Addressing the Single Judge’s remarks about “photostat quality,” the Division Bench clarified that those observations related only to the minority award, not the majority one, and were justified since the appellant had filed an unsigned photocopy.
The Bench held:
“The award, being signed by the majority and accompanied by a signed dissenting opinion, satisfies Section 31(1) and (2). The learned Single Judge rightly declined to set aside the award.”
Conclusion
The High Court dismissed the appeal and confirmed the findings of the Single Judge. It held that a majority award signed by two arbitrators with a separate signed dissent fully complies with Section 31 of the Arbitration Act.
Finding the appeal devoid of merit, the Court imposed ₹1,00,000 as costs on the appellant to be deposited with the Andhra Pradesh High Court Legal Services Committee within a month.
“The appeal is a misuse of appellate remedy. The arbitral award, having been signed and authenticated in accordance with law, cannot be invalidated on hyper-technical grounds.”
Implications
- Clarifies interpretation of Section 31 — majority-signed awards are valid even if dissenters issue separate signed opinions.
- Reinforces that signing gives legal life to an award; unsigned awards lack enforceability.
- Protects finality and efficiency in international arbitration.
- Deters frivolous challenges aimed at stalling enforcement of arbitral awards.
- Emphasizes judicial restraint in interference with reasoned arbitral findings.
