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M/S. Alopi Parshad & Sons, Ltd vs The Union Of India on 20 January, 1960

(h) The award made by the arbitrator disregarding the terms of the reference or the arbitration agreement or the terms of the contract would be a jurisdictional error which requires ultimately to be decided by the court. He cannot award an amount which is ruled out or prohibited by the terms of the agreement. Because of a specific bar stipulated by the parties in the agreement, that claim could not be raised. Even if it is raised and referred to arbitration because of a wider arbitration clause such claim amount cannot be awarded as the agreement is binding between the parties and the arbitrator has to adjudicate as per the agreement. This aspect is absolutely made clear in Continental Construction Co. Ltd. (1988) 3 SCC 82 : (1988) 3 SCR 103, by relying upon the following passage from Alopi Parshad v. Union of India AIR 1960 SC 588: (1960) 2 SCR 793 which is to the following effect:
Supreme Court of India Cites 3 - Cited by 298 - J C Shah - Full Document
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