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Arbitrator not bound to give reasons

The Supreme Court has dismissed the appeal of Indian Rare Earths Ltd challenging the arbitration award in its dispute with Unique Builders. It stated that the award was given without providing reasons. Therefore "it is not permissible for the court to probe into the mental process of the learned arbitrator." The arbitrator is not bound to give reasons unless it is specified in the contract or there is a statute binding on him or the court orders so. In this case, the dispute over the tax content in payment was decided by arbitration and the builder's demand was drastically reduced by the arbitrator. Therefore, the government company could not challenge the award, the Supreme Court said while upholding the Orissa High Court view.

 Article referred: http://www.business-standard.com/article/opinion/higher-price-in-re-auction-not-legal-115082300797_1.html

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