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Issues: (i) Whether a challenge to the order passed in proceedings under section 11(6) of the Arbitration and Conciliation Act, 1996 was maintainable before the Supreme Court; (ii) whether questions relating to the validity, scope, and effect of the arbitration clause, and the constitution of the arbitral tribunal, had to be decided by the arbitral tribunal itself under section 16 of the Arbitration and Conciliation Act, 1996.
Issue (i): Whether a challenge to the order passed in proceedings under section 11(6) of the Arbitration and Conciliation Act, 1996 was maintainable before the Supreme Court.
Analysis: The order under challenge had been rendered in an adjudicatory manner on contentious issues relating to the existence and legality of the arbitration arrangement. In that setting, the Court held that the bar against treating a section 11 order as an adjudicatory determination could not be pressed to defeat the appeal, particularly because the High Court had gone beyond the limited function contemplated in section 11 proceedings.
Conclusion: The challenge was maintainable.
Issue (ii): Whether questions relating to the validity, scope, and effect of the arbitration clause, and the constitution of the arbitral tribunal, had to be decided by the arbitral tribunal itself under section 16 of the Arbitration and Conciliation Act, 1996.
Analysis: The Court applied the principle that objections concerning the existence or validity of the arbitration agreement, the propriety of the tribunal's constitution, and alleged inconsistencies between the contract and the institutional rules fall within the arbitral tribunal's own jurisdiction. The legislative scheme of the 1996 Act was read as requiring minimal judicial intervention and leaving such contentious issues to be raised before the tribunal after it is constituted.
Conclusion: Such objections were required to be decided by the arbitral tribunal itself and not by the High Court or the institution at the threshold.
Final Conclusion: The arbitration machinery was directed to move forward by nomination of an arbitrator, while leaving all jurisdictional and contractual objections open for decision before the arbitral tribunal.
Ratio Decidendi: Under the Arbitration and Conciliation Act, 1996, contentious objections to the arbitration agreement, tribunal constitution, and jurisdiction are for the arbitral tribunal to decide under section 16, and the section 11 stage is confined to facilitating constitution of the tribunal with minimal court interference.