Arbitration appointment stage and threshold jurisdictional issues under section 11 left for reconsideration by the Supreme Court

A court approached under sections 8 or 11 of the Arbitration and Conciliation Act, 1996 may itself decide threshold matters such as the existence of an arbitration agreement, the existence of a dispute, excepted matters and limitation, even though jurisdictional objections may also arise before the arbitrator under section 16(1). The note examines whether an order by the Chief Justice or nominee under section 11 on such preliminary issues is administrative or judicial in nature, and highlights the practical effect of treating it as administrative, including delay and multiplicity of proceedings. The papers were directed to be placed before the Chief Justice of India for appropriate orders, and the question was left for reconsideration.

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Issues: Whether an order passed by the Chief Justice or his nominee under section 11 of the Arbitration and Conciliation Act, 1996 on preliminary issues is administrative or judicial in nature and whether the question required reconsideration in the light of competing authorities on the scope of court intervention at the stage of appointment of arbitrators.

Analysis: The order recorded substantial submissions that, although an arbitrator may decide issues of jurisdiction under section 16(1) of the Arbitration and Conciliation Act, 1996, a court approached under section 8 or section 11 may itself decide threshold questions such as the existence of an arbitration agreement, the existence of a dispute, excepted matters, and limitation for invoking the clause. It also noted the practical consequences of treating such an order as administrative, including multiplicity of proceedings and delay, and observed that the issue arose frequently and had a substantial bearing on arbitration practice.

Outcome: The papers were directed to be placed before the Hon'ble Chief Justice of India for appropriate orders, and the question was left for reconsideration.

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