P.M. PAUL vs UNION OF INDIA

The Supreme Court held that under Section 30 of the Arbitration Act, 1940, an award can only be set aside if the arbitrator has misconducted himself or the proceedings. The Court clarified that adjudicating on matters not subject to the arbitration is considered legal misconduct. In this case, the arbitrator's decision to award escalation costs was within his jurisdiction, as the dispute pertained to the responsibility for delays in contract execution. The Court upheld the award, affirming that the respondent was liable for the consequences of the delay, including price increases.