Waiver of jurisdictional objection in arbitration bars annulment of award when no plea was raised before the tribunal.
A jurisdictional objection under the Arbitration and Conciliation Act, 1996 may be raised in Section 34 proceedings as a legal plea, but where no objection was raised before the arbitral tribunal and the award was already made, the award cannot be set aside solely on that ground because the plea is treated as waived under the statutory scheme of Sections 16, 34 and 4. Lion Engineering was not treated as conflicting with L.G. Chaudhary (II), and omission to cite it did not make L.G. Chaudhary (II) per incuriam. The matter was remitted for decision on the surviving Section 34 objections other than the jurisdictional challenge.
Issues: (i) Whether an arbitral award passed under the Arbitration and Conciliation Act, 1996 could be annulled solely on the ground of lack of jurisdiction where no jurisdictional objection was raised before the arbitral tribunal. (ii) Whether the later decision in Lion Engineering conflicted with the exception carved out in L.G. Chaudhary (II), and whether L.G. Chaudhary (II) was per incuriam for not referring to Lion Engineering.
Issue (i): Whether an arbitral award passed under the Arbitration and Conciliation Act, 1996 could be annulled solely on the ground of lack of jurisdiction where no jurisdictional objection was raised before the arbitral tribunal.
Analysis: The statutory scheme of Sections 16 and 34 of the Arbitration and Conciliation Act, 1996 recognises that a jurisdictional plea should ordinarily be raised before the arbitral tribunal. Failure to do so may amount to waiver under Section 4, and a later plea under Section 34 is not automatically sufficient to annul an award. The Court held that where the award has already been made and the party did not object at the relevant stage, the award cannot be set aside only on the ground of lack of jurisdiction. The earlier failure to object is not treated as a sufficient reason to disturb the award at the Section 34 stage.
Conclusion: The award could not be annulled solely on the ground of lack of jurisdiction.
Issue (ii): Whether the later decision in Lion Engineering conflicted with the exception carved out in L.G. Chaudhary (II), and whether L.G. Chaudhary (II) was per incuriam for not referring to Lion Engineering.
Analysis: Lion Engineering was understood as permitting a jurisdictional plea to be raised in Section 34 proceedings as a legal plea, but it did not decide that such a plea must result in annulment of the award irrespective of waiver or other constraints. L.G. Chaudhary (II) was read as carving out a limited exception for cases involving the M.P. statutory regime where the award had already been made and no objection had been taken at the relevant stage. The Court found no direct conflict between the two decisions and held that omission to cite Lion Engineering did not render L.G. Chaudhary (II) per incuriam.
Conclusion: There was no conflict warranting a per incuriam finding against L.G. Chaudhary (II).
Final Conclusion: The impugned judgment was unsustainable, and the matter had to go back for decision on the surviving Section 34 objections other than the jurisdictional challenge based on the M.P. Act.
Ratio Decidendi: A jurisdictional objection under Section 34 of the Arbitration and Conciliation Act, 1996 may be raised as a legal plea, but where the party failed to object before the arbitral tribunal and the award has already been made, the award cannot be annulled only on that ground because the objection is treated as waived unless a sufficient justification is shown.
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