The Supreme Court has reinforced the principle that an arbitral tribunal’s jurisdiction cannot be contested after a statement of defense is submitted.
A bench comprising Justices Abhay S. Oka and Ujjal Bhuyan dealt with a case where the respondent raised jurisdictional objections post-submission of its defense. The tribunal dismissed the objection and later issued an award. However, the District Judge overturned this award, a decision subsequently upheld by the Allahabad High Court.
Referring to Section 16(2) of the Arbitration and Conciliation Act, 1996, the appellant argued that the High Court erred in affirming the District Judge’s ruling. The appellant claimed the respondent waived its right to challenge the tribunal’s jurisdiction by accepting the arbitrator’s appointment and being permitted to amend its defense after filing it.
Justice Oka, in the Supreme Court’s judgment, emphasized that challenging the tribunal’s jurisdiction after filing the statement of defense is impermissible. The judgment noted, “After February 14, 2004, the respondent could not have objected to the arbitrator’s jurisdiction. Thus, the objection raised on April 24, 2004, was rightly dismissed by the arbitrator on October 20, 2004.”
The court also observed that the respondent’s actions and Section 16(2) of the Arbitration Act, along with Sections 34 and 37, invalidated the objections to the tribunal’s jurisdiction. Consequently, the decisions of the lower courts could not stand.
The Supreme Court allowed the appeal.
Case Title: M/S Vidyawati Construction Company vs. Union of India
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