Case Name : M/s Dyna Technologies Pvt Ltd vs M/s Crompton Greaves Ltd Case Reference: (2019) 1 SCR 295 : (2019) 20 SCC 1 Neutral Citation: Case Number: CA 2153/2010 Court: Supreme Court Bench: 03 Coram: NV Ramana (Author), Mohan M Shantanagoudar, Ajay Rastogi Date: 18.12.2019
Necessity of Reasoned Award
Arbitration proceedings are not per se comparable to judicial proceedings. Parties may opt for arbitration before any person, even those who do not have prior legal experience. (Para 30) Requirement for reasoning should be given a rational meaning in light of commercial wisdom inherent in choice of arbitration. Held: Raipur Development Authority vs Chokhamal Contractors and S Harharan Singh vs Union of India both legislatively overruled (Para 33)
Section 31(3) expressly requires reasoned award as a default. Passing of reasoned award is not an empty formulation under A&C Act, 1996 (Para 33)
However, section 31(3) does not require an elaborate judgment; the reasoning can be implied by the court from a fair reading of the award and documents referred to (Para 35)
Explanation of a Reasoned Order
It must be proper, intelligible and adequate (Para 36) If the challenge is based on impropriety or perversity, it must strictly be challenged on those grounds If the challenge is that the award is unintelligible, it would amount to no reasons Adequacy: degree of particularity cannot be stated in a precise manner as that depends on the complexity of the issue Even if court concludes that there is a gap in the reasoning, court needs to have regard to the documents submitted and the contentions raised Awards with inadequate reasons must not be set aside in casual and cavalier manner
Purpose of section 34(4) - Remand for reasoning
The purpose of section 34(4) is to give an opportunity to the Tribunal to undo curable defects. (Para 37)
The award can be set aside, only when there is complete perversity in the reasoning (Para 38)
Alternative View not ground to set aside arbitral award
Courts should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied (Para 27) :: unless the award portrays perversity unpardonable under A&C Act, 1996 - Section 34
– Refer also: Raipur Development Authority vs Chokhamal Contractors, AIR 1990 SC 1426 Requirement of reasons under Arbitration, 1940 only if so required S Harharan Singh vs Union of India, (1990) 4 SCC 647 Som Datt Builders Ltd vs State of Kerala, (2009) 4 ARB LR 13 SC
See also: A&C Act, 1996 - Section 31 A&C Act, 1996 - Section 37 Contracts - Section 23 Contracts - Section 73
PDF: Dyna Technologies vs Crompton Greaves, (2019) 1 SCR 295.pdf