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JC - Legal Updates - Arbitrator cannot travel beyond the contract, if he has, he would be acting without jurisdiction

Legal Updates

31 Jul 2021

Arbitrator cannot travel beyond the contract, if he has, he would be acting without jurisdiction

The Supreme Court (“Court”) in PSA SICAL Terminals Pvt. Ltd vs The Board of Trustees of V.O. Chidambranar Port Trust Tuticorin & Ors. [Civil Appeal nos. 3699-3700 of 2018] whiledismissing the Appeal and upholding setting aside of the Arbitral Award for being patently illegal, observed that the jurisdiction of the Arbitrator being confined to the four corners of the agreement, can only pass such an order which may be the subject­ matter of reference. If he has travelled beyond the contract, he would be acting without jurisdiction.

In the instant matter, the Court observed that the Arbitral Tribunal, by the impugned Award, had thrust upon a new term in the Agreement between the parties. The ‘royalty payment method’ was substituted by the Arbitral Tribunal, with the ‘revenue­ sharing method’. Moreover, the findings of the Arbitral Tribunal that there was a change in law are based on ‘no evidence’ and ‘ignorance of vital evidence’ in arriving at its decision, and therefore, the Court held that the Award would come in the realm of perversity.


For any further information, please contact Mr. Shubhabrata Chakraborti (shubhabrata.chakraborti@jclex.com) or Mr. Dhruv Malik (dhruv.malik@jclex.com).