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The reference to a dispute under an agreement determines the boundaries of the arbitrator's competence and jurisdiction. If the arbitrator had claimed authority not exercised by him, the award to the degree to which it is outside the arbitrator's jurisdiction will be void and liable to be set aside. 

Section 34(2)(a)(iv) of the Act provides that an arbitral award is liable to be set aside if it deals with or does not fall within the terms of reference of a conflict not contemplated by the reference, or if it includes a judgment on matters outside that reference. 

The Supreme Court amended the award in Gautam Construction & Fisheries Ltd v. National Bank for Agriculture and Rural Development[vii] to the degree that the construction rate intended for the ground floor could not be extended to the construction of the basement area. 

A matter under a writ petition has been referred to arbitration in Rajinder Kishan Kumar v. Union of India[viii]. The writ petition contained no argument for compensation for harm to the land's capacity due to the discharge of waste and slurry on the land by the opposing party. It was held that the grant of such compensation was beyond the field of reference and was thus liable to be set aside. 

Section 16 of the Arbitration and Conciliation Act, 1996 states that the Tribunal is responsible for the initial judgment as to jurisdiction. As for excess authority, the party should immediately object. If the Tribunal rejects the objection, the aggrieved party may request that the objection be set aside on the basis of the excess of jurisdiction in accordance with Section 34(2)(a)(iv). 

An arbitrator will not go against the terms of the agreement. The arbitrator has the right to interpret them if the terms of the contract are not explicit or unambiguous. A majority of claims allowed were against the terms of the contract in the State of Rajasthan v. Nav Bharat construction.[ix]. 


Section 34(2)(b)(ii) specifies that if the arbitral award is in conflict with the public policy of India, an application to set aside an arbitral award can be created. The clarification of clause (b) makes it clear that an award won for fraud or corruption will also constitute an award against India's public policy. An award won by hiding evidence, misleading or deceiving the arbitrator, bribing the arbitrator, exerting pressure on the arbitrator, etc., will be responsible for setting aside the award. 

The definition of public policy represents a certain topic that affects public benefit and public interest. 

In Venture Global Engg v. Satyam Computer Service Ltd [xv], it was held that an award could be set aside if it were contrary to, or patently illegal to, the fundamental policy of Indian law or the interests of India or justice or morality. 

Where the award is contrary to, or contrary to, the substantive provisions of the law or the provisions of the Act, or to the terms of the contract, it would be patently unconstitutional to intervene in compliance with Section 34. The award may also be set aside if it is as unjust and irrational as it is against public policy to shake the court's conscience. 


This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.

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BY : Shivani Kinniwadi

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