The issue presented in Smarter Tools, Inc. v. Chongqing SENCI Import & Export Trade Co., 2019 U.S. Dist. LEXIS 50633 (S.D.N.Y. Mar. 26, 2019), was whether the arbitral award was sufficiently reasoned.
According to the court, reasoned awards are not required in arbitration, but if the parties contract for such an award, as they did here, they are entitled to receive such a document. Upon review, the court found that the arbitrator in this case provided the parties a “barely colorable justification” for the decision, leading the court to hold that the award did not meet the necessary standard.
According to the court, Second Circuit precedent indicates that a “reasoned award” requires “something more than a line or two of unexplained conclusions, but something less than full findings of fact and conclusions of law on each issue raised before the panel.” Leeward Const. Co., Ltd. v. Am. Univ. of Antigua-College of Medicine, 826 F.3d 634, 640 (2d Cir. 2016). In other words, “[a] reasoned award sets forth the basic reasoning of the arbitral panel on the central issue or issues raised before it,” but “need not delve into every argument made by the parties.” Id.