Arbitral tribunal constitution challenge falls under Section 16, while ICA rules validly governed substitute appointment.
Where an arbitration clause required a three-member tribunal and was silent on how to resolve objections to a nominated arbitrator, the Indian Council of Arbitration's procedural rules governed the substitution process. After notice and an opportunity to replace the nominee were given and no substitute was furnished, the Council validly appointed a substitute nominee and constituted the tribunal. A challenge to the tribunal's constitution was treated as a jurisdictional objection falling within Section 16, not a basis for recourse under Section 14. The Section 14 petition was therefore not maintainable, and the arbitral tribunal was held to be validly constituted.
Issues: Whether the petition under Section 14 of the Arbitration and Conciliation Act, 1996 was maintainable to challenge the constitution of the arbitral tribunal, and whether the Indian Council of Arbitration was empowered to substitute the nominated arbitrator when objection was raised to his appointment.
Analysis: The arbitration clause required the dispute first to be attempted through amicable settlement and, if unresolved, to be referred to a board of three arbitrators, with the third arbitrator to be appointed under the Indian Council of Arbitration Rules. When objection was raised to the State's nominee, the Council gave notice and opportunity to substitute the name and, on failure to do so, proceeded under its rules to appoint a substitute nominee and constitute the tribunal. Since the arbitration agreement was silent on the procedure for resolving objections to a nominee, the Council's procedural rules governed the situation. The challenge to the tribunal's constitution was, in substance, a jurisdictional objection that could be raised before the tribunal itself under Section 16, and not by recourse to Section 14.
Conclusion: The application under Section 14 was not maintainable and its dismissal was justified; the arbitral tribunal was validly constituted.
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