ASSOCIATED ENGINEERING CO. vs GOVERNMENT OF ANDHRA PRADESH AND ANR.

The Supreme Court held that an arbitrator must operate within the bounds of the contract and cannot act arbitrarily or exceed his jurisdiction as defined by the Arbitration Act. The Court clarified that a non-speaking award can be interfered with if it contains errors apparent on the face of it, and that evidence outside the award may be admissible to determine the arbitrator's jurisdiction. The appeal of the Contractor was dismissed, while the appeal of the State Government was partly allowed, emphasizing the need for arbitrators to adhere strictly to the contractual terms.