S. 16 Arbitration Act | Challenge To Arbitral Tribunal's Jurisdiction Impermissible After Submitting Statement Of Defence : Supreme Court
The Supreme Court affirmed the principle that the jurisdiction of the arbitral tribunal cannot be challenged after the submission of the statement of defence. A bench of Justices Abhay S Oka and Ujjal Bhuyan was hearing a case in which the respondent had objected to the jurisdiction of the Arbitral Tribunal after submitting its statement of defence. The Arbitral Tribunal rejected the...
The Supreme Court affirmed the principle that the jurisdiction of the arbitral tribunal cannot be challenged after the submission of the statement of defence.
A bench of Justices Abhay S Oka and Ujjal Bhuyan was hearing a case in which the respondent had objected to the jurisdiction of the Arbitral Tribunal after submitting its statement of defence. The Arbitral Tribunal rejected the objection and subsequently passed an award. However, the District Judge set aside this award, and this decision was upheld by the Allahabad High Court.
Taking reference to Section 16(2) of the Arbitration & Conciliation Act, 1996 ("Act"), the Appellant argued that the High Court erred in affirming the District Judge's decision to set aside the arbitral award. The Appellant contended that by accepting the appointment of the sole arbitrator and being allowed to modify its statement of defence, the Respondent waived its right to challenge the tribunal's jurisdiction after the statement of defence had been filed.
Setting aside the High Court's decision, the judgment authored by Justice Oka observed that it would be impermissible for the Respondent to submit the objection to the tribunal's jurisdiction belatedly after submitting its statement of defence.
“Hence, there is a clear bar on raising a plea of the lack of jurisdiction of the Arbitral Tribunal after submission of the statement of defence. Therefore, after 14th February, 2004, the respondent could not have objected to the jurisdiction of the sole Arbitrator. Hence, the objection raised by way of an application dated 24th April 2004 was rightly rejected by the learned Arbitrator by the order dated 20th October, 2004."
“In view of the respondent's conduct and sub-Section (2) of Section 16 of the Arbitration Act, Sections 34 and 37 Courts were not right in upholding the respondent's objection to the jurisdiction of the Arbitral Tribunal. Therefore, the impugned judgments cannot be sustained.”, the court added.
Accordingly, the Appeal was allowed.
Case Title: M/S VIDYAWATI CONSTRUCTION COMPANY VERSUS UNION OF INDIA
Citation : 2025 LiveLaw (SC) 105