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 limiting case on waiver. Without it, the rule in Krishna Bhagya Jala Nigam would mean that a party can never safely appear before a tribunal that has overreached.
Facts
By express agreement the parties referred to arbitration only the claims for refund of the hire charges. On entering the reference the arbitrator enlarged its scope. Despite objections he continued to adjudicate on the enlarged dispute, so that the parties were left with no option but to participate in the proceedings.
Held
Such participation did not amount to acquiescence. Once appointed, the arbitrator has the duty to adjudicate only the matter brought before him by the parties. The award was liable to be set aside, the arbitrator having misdirected himself and committed legal misconduct.
Reasoning
Step one — the reference is the mandate. The parties fixed the subject: refund of hire charges. Everything else was outside it.
Step two — objection preserves the point. The parties did object. What followed was participation under compulsion, not a free choice to submit the enlarged dispute.
Step three — compelled participation is not consent. Waiver under s. 4 rests on a party proceeding without stating its objection. Where the objection is on the record, the foundation of waiver is gone.
Step four — the consequence. Enlarging the reference is legal misconduct, and the award falls; what is beyond the reference is invalid, and if inseverable the whole award goes.
Exam use
It opens: Is a party who participates bound by the award? — as the qualification to acquiescence.
Draft the answer as a pair. State Krishna Bhagya Jala Nigam first, then this case as the exception, then give the practical rule: record the objection and continue under protest. That is the advice an examiner is looking for in a problem question.
Add Jivrajbhai Ujamshi Sheth for the effect on the award — invalid to the extent of the excess, wholly bad if inseverable — and Continental Construction for the parallel case of a claim barred by the contract.
It does not decide whether a party may simply walk out once it has objected; the safer course, on the authorities in this paper, is to stay, object and challenge later.