CONTINENTAL CONSTRUCTION CO. LTD. vs STATE OF MADHYA PRADESH

The Supreme Court held that under the Arbitration Act, 1940, a contractor cannot claim extra costs due to delays caused by the other party unless specific legal questions are referred to the arbitrator. The Court found that the arbitrator had misconducted himself by allowing claims without addressing the State's objections, and thus the award was set aside. The Court emphasized that the arbitrator must adhere to the law and cannot ignore contractual obligations, affirming the District Judge's decision to reject the contractor's claims for extra costs.