HINDUSTAN CONSTRUCTION vs NATIONAL HIGHWAYS CA 4658/23 24/08/23 [ Ravindra JJ ]

[ SUPREME COURT OF INDIA ]

• Arbitration and Conciliation Act Section 34 Majority award A dissenting opinion cannot be treated as an award if the majority award is set aside When a majority award is challenged by the aggrieved party, the focus of the court and the aggrieved party is to point out the errors or illegalities in the majority award Minority award (or dissenting opinion, as the learned authors point out) only embodies the views of the arbitrator disagreeing with the majority There is no occasion for anyone such as the party aggrieved by the majority award, or, more crucially, the party who succeeds in the majority award, to challenge the soundness, plausibility, illegality or perversity in the approach or conclusions in the dissenting opinion – That dissenting opinion would not receive the level and standard of scrutiny which the majority award (which is under challenge) is subjected to. Therefore, the so-called conversion of the dissenting opinion, into a tribunal’s findings in the event a majority award is set aside and elevation of that opinion as an award, would, with respect, be inappropriate and improper.

important paras 

26. In Dakshin Haryana Bijli Vitran Nigam Ltd, the court recollected the previous holding in Ssangyong Engg. & Construction Co. Ltd. v. NHAI (hereafter, “Ssangyong Engg. & Construction Co. Ltd.”)23, wherein the court had set aside the majority award, but issued consequential directions in the peculiar facts of the case:
“In Ssangyong [Ssangyong Engg. & Construction Co. Ltd. v. NHAI, (2019) 7 SCR 522], this Court upheld the view taken by the dissenting arbitrator in exercise of its powers under Article 142 of the Constitution, in order to do complete justice between the parties. The reason for doing so is mentioned in para 77 i.e. the considerable delay which would be caused if another arbitration was to be held. This Court exercised its extraordinary power in Ssangyong [Ssangyong Engg. & Construction Co. Ltd. v. NHAI,] keeping in mind the facts of the case, and the object of expeditious resolution of disputes under the Arbitration Act.”
However, the court did not, in Dakshin Haryana Bijli Vitran Nigam Ltd (supra)
direct the dissenting opinion to be treated as an award. In the opinion of this court, that approach is correct, because there appears to be a slight divergence in thinking between Russel and Gary Born. The former, Russel is careful to point out that a dissenting opinion is not per se an award, but “is for the parties’ information only and does not form part of the award, but it may be admissible as evidence in relation to the procedural matters in the event of a challenge.” However, Gary Born does not expressly say that the opinion is not a part of the award. That author yet clarifies that “This is an essential aspect of the process by which the parties have an opportunity to both, present their case, and hear the reasons for the Tribunal’s decision; not hearing the dissent deprives the parties

of an important aspect of this process.”
27. It is, therefore, evident that a dissenting opinion cannot be treated as an award if the majority award is set aside. It might provide useful clues in case there is a procedural issue which becomes critical during the challenge hearings. This court is of the opinion that there is another dimension to the matter. When a majority award is challenged by the aggrieved party, the focus of the court and the aggrieved party is to point out the errors or illegalities in the majority award. The minority award (or dissenting opinion, as the learned authors point out) only embodies the views of the arbitrator disagreeing with the majority. There is no occasion for anyone- such as the party aggrieved by the majority award, or, more crucially, the party who succeeds in the majority award, to challenge the soundness, plausibility, illegality or perversity in the approach or conclusions in the dissenting opinion. That dissenting opinion would not receive the level and standard of scrutiny which the majority award (which is under challenge) is subjected to. Therefore, the so-called conversion of the dissenting opinion, into a tribunal’s findings, [in the event a majority award is set aside] and elevation of that opinion as an award, would, with respect, be inappropriate and improper.

28. In view of the findings recorded earlier, this court is of the opinion that all the appeals have to succeed. Therefore, C. A. No. 4658/2023, C. A. No. 4659/2023; C. A. No. 4660/2023; C. A. No. 4661/2023 and C. A. No. 4662/2023 are allowed; all judgments of the Delhi High Court, which were the subject matter of challenge in those appeals are set aside. The awards, which were the subject matter of challenge, and to the extent they were set aside, are hereby upheld and restored. The direction in the awards, to the extent they required compounded monthly interest payments, are modified. Instead, the NHAI shall pay uniform interest on the amounts due, on the head concerned, i.e., construction of embankment, to the extent of 12% from the date of award to the date of payment, within eight weeks from today. All the above appeals are allowed in these terms. There shall be no direction to pay costs.

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40706_2012_5_1501_46332_Judgement_24-Aug-2023

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