When Plea Regarding Lack Of Jurisdiction Not Raised Before The Arbitrator, It Cannot Be Raised In Appeal: Madras High Court

The bench of Justices R. Subramanian and R. Sakthivel also held that an objection regarding validity of the invocation of the arbitration dismissed by the Court under Section 11 cannot be raised again in appeal.

Facts

The dispute between the parties was referred to arbitration by the Court vide an order dated 17.09.2019. At the time of the appointment, the Court had rejected the objection by the appellant to the invocation of arbitration by the Secretary of Housing Society (Respondent).

The arbitrator allowed the claims of the respondent and directed the appellant to pay certain sums to the respondent. Aggrieved thereby, the appellant challenged the award before the Single Bench.

The Single Bench dismissed the challenge petition and upheld the arbitration award. Aggrieved again, the appellant filed an appeal under Section 37 of the A&C Act.

Grounds of Appeal

The appellant challenged the award on the following grounds:

• The invocation of the arbitration was invalid since the secretary could not invoke the arbitration on behalf of the housing society.
• There was no arbitration agreement between the parties, therefore, the entire proceedings and the resultant award are vitiated.

Analysis by the Court

The Court held that the first objection/ground of the appellant regarding invalid invocation of arbitration was already dealt by the Appointing Court which had rejected the objection and appointed the arbitrator.

The Court held that an objection regarding validity of the invocation of the arbitration dismissed by the Court under Section 11 cannot be raised again in appeal.

Next, the Court dealt with the issue of lack of arbitration agreement. The Court observed that this objection was never raised before the arbitrator or before the Single Bench under Section 34. Further it observed that Section 16(2) requires a party to take objection to jurisdiction not later than the submission of the statement of defence.

The Court held that that a plea regarding lack of jurisdiction or invalidity of the appointment of the arbitrator must be raised before the arbitrator during the arbitral proceedings. It held that if such a plea is not taken at the first instance under Section 16(2), the Court in appeal cannot entertain such an objection.

Accordingly, the Court dismissed the appeal.

Case Title: M/s Colorhome Developers Pvt Ltd v. M/s Color Castle Owners Society, OSA(CAD) No. 113 of 2022

Citation: 2024 LiveLaw (Mad) 169

Date: 25.03.2024

Counsel for the Appellant: Mr. ARL. Sundaresan, Senior Advocate for Mr. AR. Karthik Lakshmanan

Counsel for the Respondent: Ms. Shoba Srikanth

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