Case Note & Summary
The appellant, M/s. Pandi Devi Oil Private Limited, filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996 challenging an arbitral award dated 18/3/2015 passed in terms of consent terms signed between the parties. The consent terms were executed on 18/3/2015, and the Board of Directors of the appellant had resolved on 16/3/2015 to execute and file the consent terms. The appellant admitted that the challenge was confined to the consent terms and not on merits. The appellant raised three questions of law: whether consent terms can be withdrawn at any time; whether the arbitrator could terminate proceedings without delivering the award under Section 31(5); and whether the arbitrator could declare himself functus officio. The appellant argued that the consent terms were signed under coercion and that the arbitrator should not have terminated proceedings without delivering a signed award. The respondent contended that the consent award was valid and binding. The court held that once consent terms are signed and acted upon, they cannot be unilaterally withdrawn. The arbitrator was justified in terminating proceedings and declaring functus officio. The requirement of Section 31(5) is not mandatory for consent awards. The appeal was dismissed with no order as to costs.
Headnote
A) Arbitration Law - Consent Award - Withdrawal of Consent - Section 30, Arbitration and Conciliation Act, 1996 - The appellant sought to withdraw consent terms after the arbitrator passed an award in terms thereof. The court held that once consent terms are signed and acted upon, they cannot be unilaterally withdrawn. The arbitrator was justified in terminating proceedings and declaring functus officio. (Paras 5-7) B) Arbitration Law - Delivery of Award - Section 31(5) - Section 31(5) requirement of signed copies to parties is not mandatory when the award is made in terms of consent terms under Section 30. The arbitrator's failure to deliver signed award does not invalidate the consent award. (Para 6) C) Arbitration Law - Functus Officio - Termination of Proceedings - After passing a consent award and terminating proceedings, the arbitrator becomes functus officio and cannot entertain any subsequent application for withdrawal of consent. (Para 7)
Issue of Consideration
Whether the appellant can withdraw consent terms filed before the arbitrator at any time; whether the arbitrator can terminate proceedings without delivering the award under Section 31(5); whether the arbitrator can declare himself functus officio after terminating proceedings.
Final Decision
The appeal is dismissed. The impugned order of the learned Single Judge is confirmed. No order as to costs.
Law Points
- Consent award under Section 30 of the Arbitration and Conciliation Act
- 1996 is final and binding
- cannot be unilaterally withdrawn after being acted upon
- Arbitrator becomes functus officio after terminating proceedings
- Section 31(5) delivery requirement not mandatory for consent awards
