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Dyna Technologies Pvt. Ltd v Crompton Greeves Ltd (Civil Appeal NO. 2153 of 2010) – Case analysis
Difference between Inadequacy of reasons in an arbitral award and unintelligible awards
Issue- Whether courts can set aside an arbitral award in a “casual and cavalier” manner which can defeat the whole purpose of arbitration.
What is the legislative intent behind the enactment of the section 31 of the Arbitration and Conciliation Act, 1996.
Facts: Originally the award was first challenged before a single Madras judge bench who, while upholding the award, held that the view taken by the arbitrator on the fee to be paid to the respondent by the plaintiff therein was a view taken by the arbitrator on the contract that could not be replaced by a judgment in an appeal against the award.
There is a 25-year-old dispute appeal filed by Dyna Technologies against M/s Crompton Greaves over compensation for losses suffered because certain equipment has been misused. An appeal against a Madras High Court Decision of April 2007 setting aside the award of the Arbitral Tribunal.
The Supreme Court considered an appeal that had set aside an Arbitral Award against the decision of the High Court. The High Court observed that there are inadequate explanations for the award, and the claims included in the award do not provide any arguments, discussions or conclusions.
Observations made by the court:
· The Supreme Court referred to the Section 31 of the Arbitration and Conciliation act 1996(hereinafter referred to as “the act”), which states that the arbitral award should state the reasons on which it is based, and the apex court told the purpose of the particular section which is to provide reasoning in an award which is intelligible and adequate and which can be implied by courts with a fair reading.
The Supreme Court said, when we consider the requirement of a reasoned order, three characteristics of the order should be fathomed:
1. If the reasoning in the award is improper , it implies a flaw in the process of decision making. If the challenge is entirely based on impropriety then it can be challenged under section 34 of “the act” which states the grounds for setting aside an award.
2. If the challenge is based on the unintelligibility of the award, the same would be equivalent to providing no reasons at all
3. If it is concerned with the challenge on inadequacy of reasons, the court while exercising jurisdiction under section 34 of “the act” has to adjudicate such award’s validity based on the degree of particularity of the reasoning required with having the regard to the issues falling for consideration. The degree of particularity cannot be described as it would depend on the complexity of the issue.
The court also needs to regard the documents submitted before the tribunal and the contentions made before the same so that the award cannot be set aside in a “casual and cavalier manner” .
The apex court cautioned the courts not to refuse an arbitral award solely on the ground that its rationale is inadequate. Courts should be careful to distinguish between arbitral awards that are insufficient and unintelligible awards.
The Court has distinguished between awards without intelligible reasoning and a legislative intention behind Article 34(4) of the Act. The Court has also investigated the legal intention. This provision empowers the High Court to refer the case to the Tribunal if there is no basis for an award or if there are any discrepancies that the Tribunal can address. That provision, the Court said, offers a path to prevent a challenge to an award that the Tribunal will restore and may not have to set aside.
Holding that the arbitral award was given in a "muddled and confusing manner," it was set aside by the apex court as "unintelligible" and ordered Dyna to be compensated within eight weeks as full and final settlement.
Therefore, though maintaining restraint and suggesting the same for other courts, the Supreme Court made a decision in which it laid down a conflict that spanned over two decades, and thus maintained that the Court would not find awards to be intelligible without reasons. The Court thus affirmed the legislative intent behind the enactment of Section 31 of “the act”.
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of the ratings, feedback or Documents/ Advice reviews: REGISTERED
USERS cannot submit abusive or inappropriate feedback entries,
coerce or threaten buyers into submitting feedback, submit
transaction feedback regarding them, or include personal information
about a transaction partner within a feedback entry. Furthermore,
any attempt to manipulate ratings of any REGISTERED USER is
prohibited. Any attempt to manipulate ratings, feedback, or
Documents/ Advice reviews is prohibited.
are important to the SoOLEGAL Platform, providing a forum for
feedback about Documents/ Advice and service details and reviewers'
experiences with Documents/ Advices and services –
or negative. You may not write reviews for Documents/ Advices or
services that you have a financial interest in, including reviews
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with. Additionally, you may not provide compensation for a review
(including free or discounted Documents/ Advices). Review
solicitations that ask for only positive reviews or that offer
compensation are prohibited. You may not ask buyers to modify or
REGISTERED USERS are expected to conduct proper research to ensure that the items posted to our website are in compliance with all applicable laws. If we determine that the content of a Documents/ Advice detail page or listing is prohibited, potentially illegal, or inappropriate, we may remove or alter it without prior notice. SoOLEGAL reserves the right to make judgments about whether or not content is appropriate.
following list of prohibited Documents/ Advices comprises two
sections: Prohibited Content and Intellectual Property
Listing prohibited content may result in the cancellation of your listings, or the suspension or removal of your transacting privileges. REGISTERED USERS are responsible for ensuring that the Documents/ Advices they offer are legal and authorised for Transaction or re-Transaction.
If we determine that the content of a Documents/ Advice detail page or listing is prohibited, potentially illegal, or inappropriate, we may remove or alter it without prior notice. SoOLEGAL reserves the right to make judgments about whether or not content is appropriate.
Illegal and potentially illegal Documents/ Advices: Documents/ Advices sold on SoOLEGAL.in must adhere to all applicable laws. As REGISTERED USERS are legally liable for their actions and transactions, they must know the legal parameters surrounding any Documents/ Advice they display on our website.
Offensive material: SoOLEGAL reserves the right to determine the appropriateness of listings posted to our website.
Nudity: In general, images that portray nudity in a gratuitous or graphic manner are prohibited.
Items that infringe upon an individual's privacy. SoOLEGAL holds personal privacy in the highest regard. Therefore, items that infringe upon, or have potential to infringe upon, an individual's privacy are prohibited.
Intellectual Property Violations
Counterfeit merchandise: Documents/ Advices displayed on our website must be authentic. Any Documents/ Advice that has been illegally replicated, reproduced or manufactured is prohibited.
Books - Unauthorised copies of books are prohibited.
Movies - Unauthorised copies of movies in any format are prohibited. Unreleased/prereleased movies, screeners, trailers, unpublished and unauthorized film scripts (no ISBN number), electronic press kits, and unauthorised props are also prohibited.
Photos - Unauthorised copies of photos are prohibited.
Television Programs - Unauthorised copies of television Programs (including pay-per-view events), Programs never broadcast, unauthorised scripts, unauthorised props, and screeners are prohibited.
Transferred media. Media transferred from one format to another is prohibited. This includes but is not limited to: films converted from NTSC to Pal and Pal to NTSC, laserdisc to video, television to video, CD-ROM to cassette tape, from the Internet to any digital format, etc.
Promotional media: Promotional versions of media Documents/ Advices, including books (advance reading copies and uncorrected proofs), music, and videos (screeners) are prohibited. These Documents/ Advices are distributed for promotional consideration and generally are not authorized for Transaction.
Rights of Publicity: Celebrity images and/or the use of celebrity names cannot be used for commercial purposes without permission of a celebrity or their management. This includes Documents/ Advice endorsements and use of a celebrity's likeness on merchandise such as posters, mouse pads, clocks, image collections in digital format, and so on.
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