Say the ratio out loud before you open Reasoning — recalling it unprompted is exactly what the exam pays for.
Why it matters
It is the severance case. Excess of jurisdiction is common; what students cannot state is what happens to the rest of the award, and this is the authority that answers it.
Facts
The arbitrator decided an item that had not been referred to him for adjudication.
Held
If the parties set limits to the action of the arbitrator, he must follow the limits set for him, and the court can find that he has exceeded his jurisdiction on proof of such action. The assumption of a jurisdiction he does not possess renders the award invalid to the extent to which it is beyond his jurisdiction; and if the invalid part cannot be severed from the rest, the award must fail in its entirety.
Reasoning
Step one — the reference defines the mandate. The arbitrator's authority comes from the reference made by the parties, or by the person named in the agreement with authority to appoint. He is not permitted in law to enlarge the scope of the reference.
Step two — invalidity is measured by the excess. The award is not bad in whole merely because part of it is bad. What is beyond jurisdiction is invalid; what is within it stands.
Step three — severability decides the rest. Severance is only possible where the offending part can be cut out without disturbing the reasoning or the arithmetic of what remains. Where the items are interlaced, the whole award goes.
Exam use
It opens: What is the effect of an award on a matter not referred?
Use the two-step in a problem. First identify the excess — with Continental Construction where a barred claim was awarded. Then ask whether it is severable; give the consequence either way. That structure is worth more marks than the bare proposition.
Add Union of India v. G.S. Atwal where the arbitrator enlarged the reference despite objection: the party's continued participation is not acquiescence, and the award is liable to be set aside.
It does not decide the converse case, where the arbitrator fails to decide something that was referred; the Act deals with that by the power to make an additional award.