Case Note & Summary
The dispute arose from a contract entered into by the parties in 1970-71, with an award made by the arbitrator in 1982. The petitioners challenged the award before the subordinate judge, who upheld it, leading to an appeal to the High Court that was dismissed. The petitioners then moved the Supreme Court by special leave, arguing that the unreasoned nature of the award warranted referral to a Constitution Bench, especially since similar matters had been referred. The Supreme Court noted that the point regarding the unreasoned award was not pressed before the High Court and that the arbitrator had been appointed from panels submitted by the parties. The court acknowledged that the validity of unreasoned awards was pending consideration by the Constitution Bench but decided not to refer this case, instead modifying the award to set aside the interest awarded from the commencement of the reference to the date of the award. The special leave petition was ultimately dismissed with this modification.
Headnote
A) Arbitration - Unreasoned Award - Validity of unreasoned award - Arbitration and Conciliation Act, 1996 - The petitioners contended that the unreasoned award should be referred to the Constitution Bench due to similar matters pending. The court found that the point of unreasoned award was not pressed before the High Court and declined to refer the matter to the Constitution Bench, modifying the award to set aside interest awarded from the commencement of reference to the date of the award. Held that the award is modified accordingly (Paras 146-148).
Issue of Consideration
Whether the unreasoned award by the arbitrator should be referred to the Constitution Bench for consideration.
Final Decision
The Supreme Court dismissed the special leave petition, modifying the award to set aside the interest awarded from the commencement of the reference before the arbitrator to the date of the award.
Law Points
- Validity of unreasoned award
- Modification of interest
- Appointment of arbitrator
- Reference to Constitution Bench
