Section 34 jurisdiction and foreign-seated arbitration: Indian courts may hear the challenge, but not a preliminary jurisdiction ruling.

Where Part I of the Arbitration and Conciliation Act, 1996 applied and was not excluded, Indian courts could entertain a Section 34 challenge even though the arbitration was foreign-seated and governed by ICC rules, because the contract and arbitration agreement were governed by Indian law. However, a ruling rejecting a tribunal's jurisdictional objection was treated as a preliminary decision under Sections 16 and 37, not as an award independently challengeable under Section 34. The challenge to the partial award was therefore premature and not maintainable at that stage, leaving Section 34 available only against the final arbitral award.

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Issues: (i) Whether the Indian Court had jurisdiction to entertain an application under Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside the impugned partial award made in a foreign-seated ICC arbitration governed by Indian law; (ii) Whether the impugned partial award, being a decision rejecting the jurisdictional plea of the arbitral tribunal, was maintainable as a challenge under Section 34 of the Arbitration and Conciliation Act, 1996.

Issue (i): Whether the Indian Court had jurisdiction to entertain an application under Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside the impugned partial award made in a foreign-seated ICC arbitration governed by Indian law?

Analysis: The governing agreement provided that the contract and arbitration clause were governed by Indian law. Reading the scheme of Part I of the Act, the Court held that Section 34 was not confined only to awards made in India and that, where Part I applied and was not excluded, recourse to a court against an arbitral award was available. The Court also held that the choice of foreign seat and ICC rules did not, by itself, exclude Indian court jurisdiction where the proper law of the arbitration agreement was Indian law.

Conclusion: The Indian Court had jurisdiction to entertain the Section 34 application; the objection to jurisdiction failed.

Issue (ii): Whether the impugned partial award, being a decision rejecting the jurisdictional plea of the arbitral tribunal, was maintainable as a challenge under Section 34 of the Arbitration and Conciliation Act, 1996?

Analysis: The Court distinguished between a decision on jurisdiction and an arbitral award rendered after such decision. It held that a ruling rejecting a plea of lack of jurisdiction or excess of authority is not, in substance, an award within Section 34 even if described as a partial award under the ICC procedure. The statutory scheme of Sections 16 and 37 treated such a ruling as a decision or order, while Section 34 becomes available against the subsequent arbitral award, not against the preliminary jurisdictional ruling itself. On that construction, the challenge was premature.

Conclusion: The Section 34 challenge to the partial award was not maintainable at that stage.

Final Conclusion: The appeal failed because, although the Indian Court could entertain proceedings under the Act, the particular partial award assailing the tribunal's jurisdictional ruling was not independently open to challenge under Section 34.

Ratio Decidendi: Under the Arbitration and Conciliation Act, 1996, a jurisdictional ruling rejecting a plea under Section 16 is distinct from the award contemplated by Section 34, and where Part I applies to the arbitration, Indian courts may exercise jurisdiction even in a foreign-seated arbitration governed by Indian law unless excluded by agreement.

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