Arbitral award cannot be annulled solely for applying the wrong arbitration regime when jurisdictional objection was not timely raised.

An arbitral award could not be set aside merely because the dispute may have been governed by the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 rather than the Arbitration and Conciliation Act, 1996, where the jurisdictional objection was not raised at the relevant stage and the challenge had proceeded mainly on merits. The earlier authority on the 1983 Act was distinguished on that basis. Since the Section 37 appeal had been decided only on the jurisdictional ground and its merits were not examined, the matter was restored for fresh hearing, with consequential protection of sums withdrawn under the award and resort to Article 142 to secure complete justice.

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Issues: (i) Whether the arbitral award could be set aside solely on the ground that the dispute was governed by the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 instead of the Arbitration and Conciliation Act, 1996; (ii) whether the appeal under Section 37 of the Arbitration and Conciliation Act, 1996 should be restored for decision on merits.

Issue (i): Whether the arbitral award could be set aside solely on the ground that the dispute was governed by the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 instead of the Arbitration and Conciliation Act, 1996.

Analysis: The dispute had first been taken to the Arbitration Tribunal under Section 7 of the 1983 Act. The Tribunal held that the Arbitration and Conciliation Act, 1996 would apply, and the respondents did not challenge the High Court's order appointing the arbitrator under Section 11(6) of the 1996 Act. The jurisdictional objection was not raised under Section 16(1) before the arbitrator, and the challenge before the courts was confined mainly to the merits until the later stage. In these facts, the award could not fairly be annulled only because the 1983 Act might have applied. The earlier decision concerning the 1983 Act was distinguished on the footing that it did not require annulment where jurisdictional objection had not been raised at the relevant stage and an award had already been made.

Conclusion: The award could not be set aside merely on the ground of applicability of the 1983 Act, and that objection was not accepted as a basis to sustain the impugned setting aside.

Issue (ii): Whether the appeal under Section 37 of the Arbitration and Conciliation Act, 1996 should be restored for decision on merits.

Analysis: Since the impugned judgment had set aside the award only on the jurisdictional ground, and the merits of the Section 37 appeal had not been finally examined, the appropriate course was to restore the appeal for fresh hearing. The Court also invoked Article 142 of the Constitution of India to ensure complete justice in the circumstances, and directed consequential protection of any amount withdrawn under the award pending disposal of the restored appeal.

Conclusion: The impugned judgments were set aside and the Section 37 appeal was restored to the High Court for decision on merits.

Final Conclusion: The appellant succeeded in securing restoration of the challenge to the award, while the High Court was directed to decide the restored appeal afresh without annulling the award solely on the ground of the 1983 Act.

Ratio Decidendi: An award already made should not be annulled solely on a jurisdictional objection based on applicability of a different arbitration regime when that objection was not raised at the relevant stage and the matter is otherwise fit for adjudication on merits.

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