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CS Professional · Arbitration, Mediation and Conciliation · Preparation and Execution of Arbitral Award

Mehta Exports Ltd and Sundaram Traders agreed in their arbitration clause that the tribunal need not give reasons for its award. The sole arbitrator delivers a signed, dated award for Rs 18 lakh without reasons. Which statement is correct under Section 31?

The award is acceptable without reasons. An award must state its reasons unless the parties have agreed that no reasons are to be given, or it is an award on agreed terms. Here the parties agreed in advance that no reasons would be given.

  1. AThe award is defective because reasons are mandatory in every award
  2. BThe award is acceptable because reasons are not required where the parties have agreed that none are to be givenCorrect
  3. CThe award is acceptable only if the parties' agreement is registered with the court
  4. DThe award is acceptable only if it is later converted into an award on agreed terms

Explanation

Section 31(3) requires reasons unless the parties have agreed that no reasons are to be given, or the award is on agreed terms under section 30. The first exception applies here. Registration or conversion into a consent award is not required.

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