Arbitral tribunal rejection of counterclaims as settled or time-barred is merits-based, not a jurisdictional ruling

A tribunal's rejection of counterclaims as already settled by a memorandum of meeting, not maintainable, or time-barred is an adjudication on the merits and does not amount to acceptance of a jurisdictional plea under Section 16 of the Arbitration and Conciliation Act, 1996. A direct appeal under Section 37(2)(a) lies only where the tribunal accepts that it lacks jurisdiction or is acting in excess of authority and refuses to proceed further. On that basis, the article states that such a challenge would ordinarily have to be pursued under Section 34, not by direct appeal.

---

---

Issues: Whether a partial award of the arbitral tribunal rejecting counterclaims on the basis that they had already been settled by a memorandum of meeting, or were otherwise not admissible or barred by limitation, amounted to an order accepting a plea under Section 16(2) or Section 16(3) of the Arbitration and Conciliation Act, 1996 so as to make a direct appeal maintainable under Section 37(2)(a).

Analysis: Section 37(2)(a) permits a direct appeal only when the arbitral tribunal accepts a plea that it lacks jurisdiction or is exceeding its authority. Where the tribunal examines the counterclaims and rejects them on the footing that the disputes had already been compromised or settled, or that they were otherwise not maintainable or time-barred, the decision is on the merits of the claims and not a refusal to exercise jurisdiction. The tribunal in the present case considered each counterclaim and found that the disputes stood settled by the minutes of meeting and, in respect of one claim, that it was barred by limitation. That did not attract Section 16(2) or Section 16(3).

Conclusion: The direct appeal under Section 37(2)(a) was not maintainable, and the challenge was liable to be pursued, if at all, under Section 34.

Ratio Decidendi: A tribunal's rejection of a claim or counterclaim as settled, not subsisting, inadmissible, or time-barred is an adjudication on merits and does not amount to acceptance of a jurisdictional plea under Section 16; a direct appeal lies under Section 37(2)(a) only when the tribunal accepts a plea of lack or excess of jurisdiction and refuses to proceed further.

---