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Section 31(3) of the Act requires the arbitral award to state the **reasons** upon which it is based, UNLESS:
A{'text': 'The parties have agreed that no reasons are to be given; or the award is an arbitral award on agreed terms under section 30', 'label': 'A'}
B{'text': 'The value of the dispute is less than rupees one lakh in every case regardless of the type of arbitration involved under any provision of any law in force in any State of India regardless of any other consideration', 'label': 'B'}
C{'text': 'The arbitral tribunal consists of a sole arbitrator in every case regardless of the type of arbitration involved under any provision of any law in force in any State of India regardless of any other consideration', 'label': 'C'}
D{'text': 'The arbitration is conducted entirely in writing without any oral hearing in every case regardless of the type of arbitration involved under any provision of any law in force in any State of India regardless of any other consideration', 'label': 'D'}
Answer & Solution
Correct answer: A. {'text': 'The parties have agreed that no reasons are to be given; or the award is an arbitral award on agreed terms under section 30', 'label': 'A'}
1. Section 31(3) of the Act requires reasoned awards but lists two exceptions.
2. (a) "The **parties have agreed that no reasons are to be given**".
3. (b) "The award is an **arbitral award on agreed terms** under Section 30" — that is, a recorded settlement.
4. In every other case the award must state the reasons on which it is based; failure renders it open to challenge under Section 34.
_Source: ICSI CS Executive Paper 1 — Jurisprudence, Interpretation & General Laws, Lesson 13 (Arbitration and Conciliation Act, 1996), pp. 314-333._
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