Arbitral award with irreconcilable findings on breach and ignored contract terms was unsustainable under limited supervisory review.

An arbitral award is vulnerable where it contains irreconcilable findings on the same foundational issue, especially the issue of breach of contract, because such self-contradiction amounts to legal misconduct and a jurisdictional excess. The award here treated the Government as in breach for the contractor's claim, yet also accepted a contrary claim based on contractor default, while ignoring material contractual terms and relevant facts. The Court held that a tribunal cannot sustain mutually inconsistent conclusions on liability, and that awards founded on irrelevant considerations or non-application of mind fall within limited supervisory review. The contrary award could not stand, and the challenge failed.

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Issues: Whether the courts below exceeded their jurisdiction in setting aside the arbitral award on the ground that the award was internally inconsistent and reflected legal misconduct.

Analysis: The dispute turned on whether the contractor or the Government was responsible for the breach and consequent delay. The award granted relief to the contractor on the footing that the Government was in breach, but also granted the Government a contrary claim premised on default by the contractor. The Court held that an arbitrator cannot return self-contradictory findings on the same foundational issue, and that such inconsistency amounts to legal misconduct. It further held that where the arbitrator ignores relevant contractual terms and material facts, or bases the award on irrelevant considerations, the award is vulnerable under the limited supervisory jurisdiction available in arbitration matters. Since the contractor's award had already attained finality and the finding of breach by the Government had become conclusive, the contrary award in favour of the Government could not stand.

Conclusion: The challenge to the setting aside of the Government's award failed, and the courts below were held to have acted within jurisdiction.

Final Conclusion: The award, being internally inconsistent on the central issue of breach of contract, was not sustainable, and the appeals were dismissed.

Ratio Decidendi: An arbitral award is liable to be interfered with where it contains irreconcilable findings on the same foundational issue or reflects non-application of mind by disregarding material contractual terms and relevant facts, because such inconsistency constitutes legal misconduct and a jurisdictional excess.

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