NDLI: M/s. Dyna Technologies Pvt. Ltd. Vs. M/s. Crompton Greaves Ltd.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	1996 – ss.31(3) and 34 Arbitration and Conciliation Act
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Arbitration and Conciliation Act, 1996 (26 of 1996)
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Disposed Off
Headnote	Arbitration and Conciliation Act, 1996 – ss.31(3) and 34 – Contract entered into between a company and the respondent for an aquaculture unit to be set up by such company – Respondent invited tenders for carrying out certain works for construction of ponds, channels, drains and associated works – Appellant gave proposal, estimate and quotation for carrying out the work – Respondent issued work order on 15.11.94 – On 05.01.95, the respondent instructed the employees of the appellant to stop the work – Appellant claimed compensation for premature termination of the contract – Dispute referred to Arbitral Tribunal – Claim no. 3 (loss of profit), disallowed by the Arbitral Tribunal – Not questioned by the appellant and attained finality – Only objection is in reference to claim no.2 (losses due to unproductive use of machineries) which was accepted by the Arbitral Tribunal for Rs. 27,78,125/- with interest @ 18% p.a.– Single Judge upheld the award – Division Bench partly allowed the appeal and set aside the award of the Tribunal relating to claim no.2 – Held: Mandate u/s.31(3) is to have reasoning which is intelligible and adequate and, which can in appropriate cases be even implied by the Courts from a fair reading of the award and documents referred to thereunder, if the need be – In the present case, although the Tribunal dealt with the claims separately under different subheadings, the award is confusing and jumbled the contentions, facts and reasoning, without appropriate distinction– It abruptly concluded at the end of the factual narration, without providing any reasons – Inadequate reasoning and basing the award on the approval of the respondent cannot be stated to be appropriate considering the complexity of the issue involved, and accordingly the award is unintelligible and cannot be sustained – Legislative intention of providing s.34 (4) was to make the award enforceable, after giving an opportunity to the Tribunal to undo the curable defects – When the High Court concluded that there was no reasoned award, then the award ceased to exist and the Court was functus officio u/s.34 for hearing the challenge to the award – In such case, the High Court ought to have considered remanding the matter to the Tribunal in the usual course but, it analyzed the case on merits – However, in the present case such remand to the Tribunal would not be beneficial as the case has taken more than 25 years for adjudication, without any end for the parties – Respondents to pay Rs. 30,00,000/- to the appellant in full and final settlement against claim no.2 within 8 weeks, failing which the appellant will be entitled to interest at 12% p.a. until payment, for providing quietus to the litigation. Arbitration and Conciliation Act, 1996 – s.34 – Mandate of – Discussed. Arbitration and Conciliation Act, 1996 – s.31 – Requirement of reasoned award – Discussed. Arbitration and Conciliation Act, 1996 – s.34 – Challenge to arbitral award – Award whether unintelligible or there is inadequacy of reasons in award – Held: If the challenge to an award is on the ground that it is unintelligible, the same would be equivalent of providing no reasons at all – Ordinarily unintelligible awards are to be set aside, subject to party autonomy to do away with the reasoned award – In case of an award challenged on adequacy of reasons, the Court while exercising jurisdiction u/s.34 has to adjudicate the validity of such award based on the degree of particularity of reasoning required having regard to the nature of issues falling for consideration – Courts are required to be careful while distinguishing between inadequacy of reasons in an award and unintelligible awards.
Judge	Honble Mr. Justice N.V. Ramana
Neutral Citation	2019 INSC 1395
Petitioner	M/s. Dyna Technologies Pvt. Ltd.
Respondent	M/s. Crompton Greaves Ltd.
SCR	[2019] 15 S.C.R. 295
Judgement Date	2019-12-18
Case Number	2153

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