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        Companies Law

        2002 (6) TMI 556 - HC - Companies Law

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        Arbitral jurisdiction objections cannot be challenged under section 34 before the award; the dispute must proceed first. Section 16 allows the arbitral tribunal to rule on its own jurisdiction, including objections to the existence or validity of the arbitration agreement. ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                          Provisions expressly mentioned in the judgment/order text.

                              Arbitral jurisdiction objections cannot be challenged under section 34 before the award; the dispute must proceed first.

                              Section 16 allows the arbitral tribunal to rule on its own jurisdiction, including objections to the existence or validity of the arbitration agreement. If the tribunal rejects a plea of lack of jurisdiction, it must continue the proceedings and make an award; the aggrieved party may then challenge that award under section 34. A jurisdiction ruling at the interim stage is not an interim arbitral award under section 31(6), because it does not finally decide a matter capable of final award treatment. A section 34 petition is therefore premature before the award is made, while an order accepting lack of jurisdiction is separately appealable under section 37(2).




                              Issues: Whether a petition under section 34 of the Arbitration and Conciliation Act, 1996 is maintainable before an arbitral award is made, when the arbitral tribunal has rejected a plea that it lacks jurisdiction and has directed the arbitration to continue.

                              Analysis: Section 16 confers on the arbitral tribunal the power to rule on its own jurisdiction, including objections to the existence or validity of the arbitration agreement. Where the tribunal rejects the plea of lack of jurisdiction, section 16(5) requires it to continue with the arbitral proceedings and make an award, and section 16(6) provides that the aggrieved party may challenge such award under section 34. The ruling on jurisdiction at an interim stage is not an interim arbitral award within section 31(6), because a question whether the tribunal should proceed with the reference is not a matter on which a final arbitral award can be made. The statutory scheme therefore postpones the challenge until the award is made, while an order accepting lack of jurisdiction is separately appealable under section 37(2).

                              Conclusion: The section 34 petition was not maintainable before the award and was dismissed.


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