The 26-year-old junior sous chef won the coveted head chef job at BLT Steak in New York City and a salary of $250,000 over runner-up Will Lustberg on Monday night's season finale of the Fox cooking competition.
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Chef Ramsay said: "Paul won tonight because he is probably the most passionate, determined chef to ever enter Hell's Kitchen. He will make a great head chef because his enthusiasm is contagious.
"I'm proud to hand him over to BLT Steak in New York City."
Paul, who was congratulated by his brother after his win, said: "There is so much emotion going through me. I'm happy, sad, ecstatic. My mum is looking down on me right now and knows what I've been through and how hard I have worked. This is all for her."
In choosing between Paul and Will, Chef Ramsay had admitted the decision was "incredibly difficult", saying Paul had been one of the best chefs since he arrived in the competition, while Will had been one of the most consistent.
Will congratulated Paul with a hug after the result was announced, saying: "I would much rather have won. I didn't come out here for second, I came out here for first but if I had to lose to anybody I'm glad it was Paul."
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Paul and Will's final dinner service saw them joined by former contestants. Paul's team consisted of Elise, Elizabeth, Jonathan and Carrie, while Will worked with Tommy, Natalie, Jennifer and Krupa.
Chef Ramsay congratulated them both on how they handled the service before turning to the customer comment cards to help make his decision.
Another highlight of the finale saw Chef Ramsay taking Will and Paul and their loved ones out for dinner, only for the restaurant to turn into a huge hall filled with cheering fans. Chef Ramsay told them that unlike the first episode of the series when the contestants were greeted with an empty auditorium, they were now stars and should bask in the limelight.
Elise Wims and Tommy Stevens were eliminated from the competition during the first hour of the two-hour finale, which opened with the contestants being briefly reunited with their loved ones.
Their first challenge was recreating one of Chef Ramsay's dishes purely from taste, touch and smell, which included figuring out which sort of proteins he had used. Paul devised the closest dish and won tickets to a Dodgers game and the chance to meet Tommy Lasorda.
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Each contestant then had to lead the pass during dinner service while Chef Ramsay gave them with a series of quality control tests including switching shrimp for lobster in the capolleni and parsnip puree for potato mash.
In choosing to send Tommy home, Chef Ramsay told him that he "just wasn't ready" to be head chef at BLT Steak. "Love the energy so keep going," said Chef Ramsay.
"When I arrived my goal was to create some passion and art. The whole time I was here I tried to stay true to myself," said Tommy. "It's been a learning experience, a humbling experience, at the same time it was one of the greatest experiences of my life.
"I'm a culinary juggernaut right now compared to when I walked in the door. This is the beginning for me, I'm going to keep on climbing until I conquer the world."
Chef Ramsay told Elise that she shouldn't be in tears at not making the final because he had never met anyone as resilient as her before. He also told her to keep her jacket because she deserved it.
"I've been slammed, I've been kicked while I'm down and I still got back up. I fought hard to be here," said Elise.
"Thank you Chef Ramsay for being hard on me and helping me to improve on my weaknesses. After this I'm prepared for any obstacle that comes my way because nothing can be harder than this."
Hell's Kitchen airs on Fox