Waiver of jurisdictional objection in arbitration upheld where pleadings and conduct expanded the dispute before the tribunal

Parties may enlarge the scope of arbitration through their pleadings and conduct, and a jurisdictional objection not raised in time is treated as waived. On that basis, the second-shipment dispute was held to fall within the arbitral tribunal's competence because it had been litigated through claims, defences and amendments without timely protest. The tribunal's findings on the agreed pumping rate and loading shortage were also upheld, as the memorandum of understanding, later confirmation letter and contemporaneous contractual evidence supported the conclusions and no perversity or legal error was shown. The challenge to the award therefore failed, and the dismissal of the section 34 petition was affirmed.

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Issues: (i) Whether the dispute concerning the second shipment was outside the scope of the arbitral reference and therefore beyond the arbitrator's jurisdiction; (ii) Whether the later pleadings and conduct of the parties enlarged the scope of arbitration and resulted in waiver of any objection to jurisdiction; (iii) Whether the arbitrator erred in holding that the parties had agreed to a pumping rate of Rs. 200 per metric tonne per hour and in assessing the shortage in loading.

Issue (i): Whether the dispute concerning the second shipment was outside the scope of the arbitral reference and therefore beyond the arbitrator's jurisdiction.

Analysis: The original reference was not treated as rigidly confined to the first letter invoking arbitration. The disputes, claims, counter-claims, and amendments showed that the parties went on to litigate the second-shipment controversy before the arbitral tribunal. Since no timely objection was pressed before the arbitrator that this subject-matter was excluded from arbitration, the objection was treated as waived. The tribunal was competent to decide its own jurisdiction, and the scope of arbitration could be enlarged by the pleadings and conduct of the parties.

Conclusion: The second-shipment dispute was within the arbitral jurisdiction, and the objection was rejected.

Issue (ii): Whether the later pleadings and conduct of the parties enlarged the scope of arbitration and resulted in waiver of any objection to jurisdiction.

Analysis: The arbitration agreement covered disputes arising out of or relating to the contract and the memorandum of understanding. The statements of claim and defence, together with subsequent amendments, incorporated matters relating to the second shipment. Under the statutory scheme, an arbitration agreement may be evidenced and expanded through exchanges of pleadings, and a party that does not raise the objection in time is deemed to have waived it. The appellants participated in the adjudication of the enlarged dispute without insisting on exclusion of that issue.

Conclusion: The scope of arbitration stood enlarged by the pleadings and conduct, and the objection stood waived.

Issue (iii): Whether the arbitrator erred in holding that the parties had agreed to a pumping rate of Rs. 200 per metric tonne per hour and in assessing the shortage in loading.

Analysis: The memorandum of understanding, read with the later confirmation letter, established the agreed pumping rate. A subsequent letter expressing difficulty in confirming that rate did not displace the concluded arrangement already acted upon by both sides. On the loading quantity, the contemporaneous shipper communication could not override the charter-party evidence governing the contractual loading obligation. No legal error or perversity was shown in the arbitrator's factual findings.

Conclusion: The findings on pumping rate and loading shortage were upheld.

Final Conclusion: The challenge to the arbitral award failed on all substantial grounds, and the dismissal of the section 34 petition was affirmed.

Ratio Decidendi: Where parties, by their pleadings and conduct before the arbitral tribunal, submit additional disputes to decision without a timely jurisdictional objection, the objection is waived and the tribunal may decide those disputes within the widened scope of arbitration.

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