1996 (1) TMI 456 - SC - Indian Laws

Summary

Issues Involved:
The judgment involves the question of whether an arbitrator is required to provide reasons in support of their award under Section 7B of the Indian Telegraph Act, 1985.

Details of the Judgment:

Issue 1: Requirement of Reasons in Arbitrator's Award
The primary issue in this appeal was whether the arbitrator is obligated to provide reasons for their award under Section 7B of the Act. The Supreme Court referred to a previous case where it was held that an award under the Arbitration Act need not be remitted or set aside solely for lack of reasons unless required by the arbitration agreement or relevant law. However, in cases involving public interest or disputes concerning the government, it was emphasized that reasons should be given in the award. The Court highlighted the importance of reasons in ensuring transparency and accountability, especially when public funds or interests are involved.

Issue 2: Judicial Review and Public Interest
The Court reiterated that in cases affecting public interest, reasons must be recorded to facilitate judicial review and ensure fairness. Under Section 7B of the Act, the arbitrator's decision is final and cannot be challenged in court, making it crucial for the arbitrator to provide reasons for their determination. Lack of reasons would hinder the High Court's ability to assess the validity of the arbitrator's decision and understand the basis for their conclusions. Therefore, the Court held that in such cases, reasons are essential for proper adjudication and transparency.

Conclusion:
In conclusion, the Supreme Court ruled that under Section 7B of the Indian Telegraph Act, the arbitrator is required to give reasons in support of their award. Failure to provide reasons would impede the judicial review process and hinder the assessment of the arbitrator's decision. The Court set aside the arbitrator's award in this case and remitted the matter back to the arbitrator with instructions to provide reasons for the decision. Importantly, the Court clarified that this ruling applies prospectively and does not reopen previous awards made under Section 7B. The appeal was allowed with no order as to costs.