[S.16 Arbitration Act] Jurisdiction Of Tribunal Cannot Be Challenged After Submission Of Defence: Allahabad High Court

The Allahabad High Court has held that as per Section 16(2) of the Arbitration and Conciliation Act, 1996, the jurisdiction of an arbitral tribunal cannot be challenged after submission of defence and that the arbitral tribunal is empowered to adjudicate on its own jurisdiction.The bench of Justice Siddhartha Varma and Dr. Justice Yogendra Kumar Srivastava held “Section 16 of the Arbitration and Conciliation Act, 1996 provides for challenge to the jurisdictional authority of the Arbitral Tribunal. In terms of sub-section (2) thereof, a plea that the arbitral tribunal does not have jurisdiction should be raised not later than the submission of the defence. If the excess of jurisdiction crops up during the proceedings, the objection should be made at that very time. In any case, objection on the question of jurisdiction has to be made before the arbitral tribunal itself, and the arbitral tribunal has the power to rule on its own jurisdiction.”Petitioner is engaged in the business of hulling paddy to convert it into rice. In respect of dues regarding Custom Milled Rice deficit, for the year 2018-19, recovery certificates dated 4.3.2020 were issued against the petitioner. Subsequently, a citation dated 29.5.2023 was also issued in pursuance of the recovery certificates. Upon approaching the writ court, petitioner was relegated to arbitration. Petitioner approached Executive Director, U P State Employees' Welfare Corporation who appointed himself as the arbitrator and proceeded to pass an award. further recovery certificates were issued against the petitioner. Petitioner again approached the writ Court on grounds that since the Executive Director had issued earlier recovery certificates, he could not be the arbitrator. The Court observed that it was an established the petitioner had not objected to the appointment of arbitrator during the arbitral proceedings. It also observed that the petitioner counsel failed to show any prejudice caused to the petitioner by appointment of Executive Director, U P State Employees' Welfare Corporation as the arbitrator. The Court observed that as per Section 21 CPC, objections regarding jurisdiction must be taken at the earliest and not at a later stage. “Section 21 of CPC, in fact, gives statutory recognition to the principle that objection with regard to jurisdiction can be waived, and that subsequently, on account of this waiver, the party concerned would be precluded from taking any such objection.”Holding that objection regarding arbitrator has to be made before the arbitrator itself, the Court held that petitioner was disentitled to raise any objection regarding the jurisdiction of the arbitrator after having participated in the arbitral proceedings. Accordingly, the writ petition was dismissed. Case Title: M/S. Arya Rice Mill v. State Of U.P. And 6 Others 2025 LiveLaw (AB) 42 [WRIT - C No. - 41517 of 2024]Case citation: 2025 LiveLaw (AB) 42Click Here To Read/Download Order

[S.16 Arbitration Act] Jurisdiction Of Tribunal Cannot Be Challenged After Submission Of Defence: Allahabad High Court

Upasna Agrawal

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