In Brief
A contractor and the State of U.P. entered into agreements for earthwork and construction. Disputes arose regarding payment, and the parties referred the matter to arbitration. The arbitrator awarded the contractor approximately Rs. 55.6 lakh on three of six claims. The trial court upheld the award. However, the High Court set it aside, holding the arbitrator committed legal misconduct by travelling beyond the agreement. The Supreme Court reversed, holding that an award can only be set aside on grounds specified in Section 30 of the Arbitration Act, 1940. Since the objection regarding breach of contract was raised for the first time in appeal and no perversity or legal error appeared, the award could not be disturbed. The Court upheld the arbitrator's reasoned decision as representing a plausible view on the evidence.
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