The Delhi High Court, in O.M.P. (COMM) 38/2020 and connected matter O.M.P. (COMM) 372/2020, held that where parties are ad idem and an arbitral award lacks adequate reasoning, the court may remit the dispute to the arbitrator under Section 34(4) of the Arbitration and Conciliation Act, 1996. The Court disposed of the petitions with a direction to the learned Arbitrator to adjudicate the disputes accordingly.
Background & Facts
The Dispute
The disputes arise under Section 34(4) of the Arbitration and Conciliation Act, 1996, concerning the challenge to arbitral awards where the parties contend that certain claims were decided without adequate or no reasoning.
Key Facts
- The petitioner in O.M.P. (COMM) 38/2020 is the Union of India, represented by Ms. Arunima Dwivedi, CGSC, with Ms. Himanshi Singh, Ms. Monalisa Pradhan and Mr. Suman Ghosh, advocates.
- The respondent in that matter is M/S SATISH BUILDER, represented by Mr. Anshul Mittal and Mr. Sparsh Agarwal, advocates.
- In the connected matter O.M.P. (COMM) 372/2020, M/S SATISH BUILDERS is the petitioner and the Union of India is the respondent, with the same advocates appearing on respective sides.
- Both matters were listed before the Hon'ble Mr. Justice O M Prakash Shukla on 21 September 2026.
Procedural History
- The judgment does not disclose the underlying arbitration proceedings or the dates of filing of the petitions.
- The oral order was pronounced on 21 September 2026.
Relief Sought
The specific relief sought by the parties is not detailed in the judgment; the Court notes that the parties were ad idem that the matter could be remanded to the learned Arbitrator for adjudication under Section 34(4) of the Act.
The Legal Issue
The central question was whether, under Section 34(4) of the Arbitration and Conciliation Act, 1996, the Court should remit the dispute to the arbitrator for adjudication when the parties are ad idem and the arbitral award suffers from inadequate or absent reasoning on certain claims. The issue arose from the parties' consensus that the arbitral proceedings suffered from a lack of reasoned conclusions on specific claims, prompting the invocation of Section 34(4) which empowers the Court to remit matters to the arbitrator for fresh adjudication.
Arguments Presented
For the Appellant/Petitioner
The petitioner contended that the arbitral award suffered from inadequate reasoning on certain claims, rendering it liable to be remanded under Section 34(4) of the Arbitration and Conciliation Act, 1996. It urged the Court to exercise its power to remit the dispute to the learned Arbitrator for fresh adjudication, emphasizing the parties' agreement on this course.
For the Respondent/State
The respondent echoed the petitioner's position, agreeing that the award lacked sufficient reasoning and that remand under Section 34(4) was the appropriate remedy. It submitted that the Court should dispose of the petitions with a direction to the arbitrator to adjudicate the disputes in accordance with the statutory provision.
The Court's Analysis
The Court began by noting the consensus of the parties that the matter could be remanded to the learned Arbitrator under Section 34(4) of the Arbitration and Conciliation Act, 1996. It observed that the parties were ad idem on the ground that certain claims had been decided without adequate or no reasoning. The Court examined the scope of Section 34(4), which permits the Court to remit a dispute to the arbitrator when it is appropriate and not contrary to the agreement between the parties. The lack of reasoned conclusions on specific claims was identified as a circumstance justifying such remission. The Court emphasized that an arbitral award must contain reasons to enable effective judicial review under Section 34. Where reasons are absent or inadequate, the remedy of remand ensures that the arbitrator revisits the issue and provides a reasoned determination. The Court further considered that the parties' agreement eliminated any concern about contravening their arbitration agreement. Accordingly, the Court found it appropriate to exercise its power under Section 34(4) and direct the arbitrator to adjudicate the disputes afresh. The Court also disposed of any pending applications, directing that the arbitral record be sent back to the Arbitrator for further proceedings.
"Both the parties are ad idem that the matter s can be remanded to the learned Arbitrator to adjudicate the proceedings under Section 34(4) of the Arbitration and Conciliation Act, 1996 on the ground that certain claims have been decided without adequate or no reasoning."
The Verdict
The Court disposed of O.M.P. (COMM) 38/2020 and O.M.P. (COMM) 372/2020, directing the learned Arbitrator to adjudicate the disputes under Section 34(4) of the Arbitration and Conciliation Act, 1996. It ordered that the arbitral record be sent back to the Arbitrator and that any pending applications stand disposed of. No monetary compensation, interest, or specific timelines were awarded in the order.
What This Means For Similar Cases
Scope of Section 34(4) Remand
The judgment clarifies that Section 34(4) of the Arbitration and Conciliation Act, 1996, permits remission to the arbitrator not only where the Court finds the award contrary to law but also where the parties agree and the award lacks adequate reasoning on specific claims. Practitioners may now seek remand on the basis of insufficient reasoning, provided the opposing party consents.
Importance of Reasoned Arbitral Awards
The decision underscores the necessity for arbitral awards to contain reasoned conclusions on all claims. An award that omits reasoning is vulnerable to being set aside or remanded under Section 34(4). Arbitrators should ensure that each claim is addressed with a clear rationale to avoid judicial intervention.
Practical Implications for Practitioners
- When drafting or challenging an arbitral award, verify that reasons are provided for each claim; absence of grounds can be a basis for remission.
- In proceedings under Section 34, consider proposing remand under subsection (4) if the other party agrees, as it may preserve the arbitral process while addressing deficiencies.
- Ensure that any application for remand is supported by specific references to the claims lacking reasoning, as the Court looked for concrete deficiencies rather than a general challenge.
