majority, are not only required to act fairly, but are also required to follow the procedure that has been agreed by and between the parties “in conducting the proceedings”.
- 37. The term “proceeding” has not been defined in the Act. However, Article 32(1) of the Model Law provides that the arbitral proceedings are terminated by the final award. In my view, the term ‘proceeding’ includes the final deliberations/discussions that takes place between the members of the Tribunal before an Award is made and signed. Therefore, the duty to act fairly, as envisaged by section 23 of the Act, is not merely confined to the arbitration proceeding itself, but extends to the deliberations that is required to take place between the members of the Tribunal before an Award is made.
- 38. Section 37 of the Act provides that the decision of the Tribunal shall be by a majority of its members. Article 29 of the Model Law contains a similar provision.
- 39. An Award by the majority connotes an Award where each and every member of the Tribunal actively participates not only in the arbitration proceeding, but also in the deliberation that takes place between the members of the Tribunal before the Award is made and signed. There may very well be an Award by the majority, but that should only be made after there has been a proper and complete deliberation between the members of the Tribunal covering all the issues in dispute between the parties. However, if an Award is made in violation of the aforesaid procedure, it would tantamount to a procedural impropriety and therefore, the resultant Award cannot be termed as an Award by the majority. In my view, this is certainly not the intendment of the parties.
- 40. In any event, whether the Award of the Tribunal is ‘unanimous’ or ‘by a majority’, it is imperative that there must be deliberation /discussion between the members of the Tribunal prior to making and signing the Award. This is not an idle formality, but a legal requirement, as reflected in section 23 of the Act, which enjoins a positive duty upon the Tribunal to act ‘fairly’.
- 41. Furthermore, the Tribunal is not only expected to act fairly, but it must also act judicially in the discharge of its duty. If it does otherwise, that would be contrary to and violative of the principles of natural justice since judicial acts, by their very nature, are deemed to be amenable to the rules of natural justice.
- 42. In Dewan Singh v. Champat Singh, reported in AIR 1970 SC 967, the Supreme Court of India observed :
“The proceedings before the arbitra-tors are quasi-judicial proceedings. They must be conducted in accordance with the principles of natural justice.”
- 43. In the case of S.L. Kapoor v. Jagmohan, reported in AIR 1981 SC 136, it was held :
“Non-observance of natural justice by itself causes prejudice to a party and proof of prejudice to a party and proof of prejudice independent thereof is unnecessary.”
- 44. In ‘Law and Practice of International Commercial Arbitration’ (Alan Redfern and Martin Hunter, 3rd Ed., pg. 257), it has been observed :
“A tribunal should act judicially. The duty to act judicially is a duty which extends to all aspect of the proceedings.”
- 45. It has further been observed (at page 377) :
“Where an arbitral tribunal is composed of more than one arbitrator, it is self-evident that there should be discussion between the arbitrators before the award is drawn up. Some system of law contain mandatory provisions to this effect but, whether this is so or not, the principle that arbitrators must consult before issuing their award is well-recognised.”
- 46. The aforesaid principle was endorsed by the International Centre for the Settlement of Investment Disputes (ICSID) in the matter of Klockner Industries and Others v. United Republic of Cameroon, reported in (1986) XI Yearbook of Commercial Arbitration, 161.
- 47. As has been stated so aptly by Mahmood, J more than a century ago in the case of Nand Ram v. Fakir Chand, reported in ILR 7 (1885) All 523 :
“What the parties to a reference to arbitration intended is that the persons to whom the reference is made should meet and discuss together all the matters referred, and that the award should be the result of their united deliberations. This conference and deliberation in the presence of all the arbitrators is the very essence of the arbitration, and the sole reason why the award is made binding.”
- 48. In the instant case, the parties had agreed to have their dispute settled by a Tribunal comprising of three members. Both the parties also agreed that the Award of the Tribunal shall be by a majority. It was therefore implied that the Award should be the outcome of the deliberation between each and every member of the Tribunal, even though at the end, the Award may either be unanimous or by a majority. However, in no circumstances can it be inferred that by agreeing to an Award by the majority, the parties had empowered the Chairman to deliberate on the issues with only one member of the Tribunal to the exclusion of the other member before making and signing the Award.
- 49. Although section 37(2) of the Act authorizes the Chairman to decided “questions of procedure”, if authorized by the parties or all the members of the Tribunal, it does not confer any authority on the Chairman to make the Award without undertaking a proper and detailed deliberation with the other members of the Tribunal. However, in the instant case the Tribunal or, in any event, the Chairman had acted in contravention of the terms of the agreement between the parties.
- 50. Despite having made a request in writing, the 3rd Arbitrator was not given any scope or opportunity to deliberate on the issues with Chairman and the other member of the Tribunal before the Award was finalized and signed. On the contrary, he was merely required to append his signature on a one hundred page typed Award which had already been signed by the Chairman and the 2nd Arbitrator. Even if there was any deliberation before the Award was made and signed, it took place between the Chairman and the 2nd Arbitrator, evidently, without the participation and input of the 3rd Arbitrator. In such premises, the Award in question cannot be termed as an Award by the majority. Consequently, it cannot be said that the Tribunal had either acted fairly or in accordance with the terms of the agreement between the parties, as it was required to do under the Act.
- 51. From a careful reading of the provisions laid down in the Act as well as the Model Law, it appears that neither the Act nor the Model Law have considered the scenario where one of the Arbitrator is, in fact, excluded totally from the process of deliberation that is required to take place between the members of a Tribunal before an Award is made. Neither the Act or the Model Law contains any provision to that effect.
- 52. In my view, the provisions of section 43(1)(a)(v) of the Act as well as Articles 34(2)(a)(iv) and 36(1)(a)(iv) of the UNCITRAL Model Law are attracted in the instant case, both of which provides for setting aside an Award on the ground that “the arbitral procedure was not in accordance with the agreement of the parties”.
- 53. It has also been argued by Mr. Hossain that the Award is liable to be set aside on the ground of being opposed to public policy.
- 54. In the case of Hindustan Petroleum Corporation Limited v. Environmental Engineers Ltd. and another, reported in (2001) 2 Comp 79 (Bom), it was held :
“As the expression is incapable of precise definition, those challenges would be available, if the court finds the award abnoxious to its sense of justice, based on settled principles of law, whether as to the conduct of the arbitrator or arbitral proceedings or the award itself. Justice is the beginning and the end. Law must ultimately reach out to justice. Public policy contemplates that, courts must reflect it.”
- 55. In Murlidhar Agarwal and another v State of Uttar Pradesh and others, reported in AIR 1974 SC 1924, the Supreme Court of India observed :
“Public policy’, has been defined by Winfield as a principle of judicial legislation or interpretation founded on the current needs of the community.”
- 56. In the case of Oil and Natural Gas Corporation Ltd v. SAW Pipes Ltd, reported in AIR 2003 SC 2629, the Supreme Court of India held :
“In exercising jurisdiction, the Arbitral Tribunal cannot act in breach of some provision of substantive law or the provisions of the Act.”
- 57. In the case referred to above, the Court further held :
“It can be stated that the concept of public policy connotes some matter which concerns public good and the public interest. What is for public good or in public interest or what would be injurious or harmful to the public good or public interest has varied from time to time. However, the award which is, on the face of it, patently in violation of statutory provisions cannot be said to be in public interest.”
Sarwar Kamal Vs. The State, (M. Enayetur Rahim, J)
Evidently, the final deliberation that took place leading to the making and signing of the Award was only between the Chairman and the 2nd Arbitrator to the total exclusion of the 3rd Arbitrator, although the parties had referred the matter to a Tribunal comprising of three members. In my view, this is not what the Act or the Model Law contemplates and this is certainly not what the parties intended. Consequently, upholding the Award would be against the spirit and intendment of the Act and that, no doubt, would be contrary to public policy.
- 59. Having considered the submissions advanced by the learned Advocates of the contending sides and in due deference to the decisions cited above, this Court is inclined to hold that the 3rd Arbitrator was neither consulted nor given any opportunity by the Chairman of the Tribunal to deliberate and express his views on the issues before making and signing the Award under challenge.
- 60. In the premises noted above, I am of the view that there was non-compliance with the provisions of the Arbitration Act, 2001. Consequently, the Award dated 08.06.2006 made by the majority members of the Arbitral Tribunal is liable to be set aside.
- 61. Accordingly, the Award dated 08.06.2006 is hereby set aside.
There will be no order as to costs.
HIGH COURT DIVISION
(Criminal Revisional Jurisdiction)
|Mr. M. Enayetur Rahim, J.
Mr. Sheikh Md. Zakir Hossian, J.
Constitution of Bangladesh, 1972
Code of Criminal Procedure (V of 1898)
Section 401 (1)
It is contended on behalf of the petitioner that the Court may only enquire whether fraud has been committed in procuring the pardon or remission of sentence but in other case the Court has got no power to interfere or examine or touch the order passed by the President under Article 49 of the Constitution. Since the government failed to produce the relevant file and in the affidavit the State did not state any fact with regard to the same it is not possible for the Court to determine how and on which date and what manner the file was initiated by the Government, and whether the relevant file was at all placed before the President; even if, the file was placed before the President then what materials were posted for his consideration to give pardon and remit the sentence of the petitioner. Because of non production of the said file the Government have deprived this Court to answer properly all those questions. In view of the cited proposition of law, though those are not binding on us; but it has got persuasive value, the contention of the learned advocate of the