IMPORTANT POINT
The court reaffirmed that under the Arbitration Act, 1940, the grounds for setting aside an award are limited, and the sufficiency of reasons provided by the arbitrator is not subject to judicial review.

JUDGMENT :

Sabyasachi Bhattacharyya, J.

1. The present challenge has been preferred under Section 30, read with Sections 33 and 41 of the Arbitration Act, 1940 (hereinafter referred to as “the 1940 Act”), against an arbitral award passed under the said Act. The award initially matured into a decree of court, which was later recalled.

2. Learned senior counsel appearing for the petitioner contends that the award is vitiated, being devoid of reasons. Moreover, the award is perverse, being not based on any evidence. Thus, the learned Arbitrator misconducted himself or the proceedings within the contemplation of Section 30(a) of the 1940 Act, which is a valid ground for setting aside of the award under Section 30 of the 1940 Act.

3. Learned senior counsel cites the judgment of State of Rajasthan and another v. Ferro Concrete Construction Private Limited reported at (2009) 12 SCC 1 for the proposition that an Arbitrator can be said to have committed a legal misconduct by ignoring the terms of contract. In the said case, the Arbitrator had overlooked the fact that an additional provision regarding mobilization advance was introduced in the agreement itself.

4. Learned senior counsel also relies on a Division Bench judgment of this Court in the matter of State of West Bengal v. Bharat Vanijya Eastern Private Limited, reported at 2019 SCC OnLine Cal 3605 where it was observed that reasons are the links between the facts and the conclusions and they reveal the application of mind to the matters in issue and trace the journey from narrative to directive. Reasons are the life-blood of any acceptable process of adjudication and, as to whether an award or an order is reasoned or not depends more on the quality than the quantity of the words expended.

5. Learned senior counsel then cites Dyna Technologies Private Limited v. Crompton Greaves Limited reported at (2019) 20 SCC 1, where the Supreme Court stressed on the requirement of a reasoned award. The characteristics of "reasons" were found in the said judgment to be that the reasons are proper, intelligible and adequate.

6. Learned senior counsel for the petitioner also relies on Bharat Coking Coal Ltd. v. L.K. Ahuja, reported at (2004) 5 SCC 109, where it was enunciated that loss of opportunity/profits must be proved by evidence which is well-settled and accepted.

7. Next relying on Unibros v. All India Radio, reported at (2023) SCC OnLine SC 1366, learned senior counsel appearing for the petitioner argues that it becomes imperative for the claimant to substantiate the presence of a viable opportunity through evidence. The evidence should convincingly demonstrate that had the contract been executed promptly, the contractor would have secured the supplementary profits utilizing its existing resources elsewhere.

8. The petitioner also relies on Ssangyong Engineering & Construction Company Limited. v. National Highways Authority of India (NHAI) reported at (2019) 15 SCC 131 in support of the proposition that perversity is still a good ground for challenge of an award and a finding based on no evidence at all or an award which ignores vital evidence would be perverse and liable to be set aside on the ground of patent illegality.

9. Learned senior counsel also argues that the reasons purportedly given by the learned Arbitrator are not legally sustainable. It is contended that the grounds for challenge of an award under the 1940 Act are much broader than those provided in Section 34 of the Arbitration and Conciliation Act, 1996 (for short, “the 1996 Act”). Giving reasons, it is submitted, is a basic requirement of natural justice.

10. By placing various portions of the award under the different heads of claims, learned senior counsel appearing for the petitioner argues that the Arbitrator's statements were sweeping generalizations and conclusions drawn at the whims and fancy of the Arbitrator, which cannot qualify as findings of fact at all.

11. It was a fallacy on the part of the Arbitrator, it is argued