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Discussion on Section 16 of Arbitration and Conciliation Act, 1996: Consideration of Objections
The principle of minimum judicial involvement is followed in arbitration matters so that the Court does not intervene periodically in the arbitral proceedings. Section 16 of the Arbitration and Conciliation Act, 1996 is an exception as it gives the parties the right to question the competency of the arbitral proceedings. The Tribunal's power to challenge the jurisdiction because the arbitrator himself thinks he cannot proceed further with the arbitration proceeding. Then there is no point in moving ahead with the arbitral proceeding. If the arbitral tribunal finds that it is not competent, an appeal can be filed under Section 37. Still, the situation is different if the arbitral tribunal considers that it is capable, then no right to appeal is provided in such cases if an award is passed.
The jurisdiction should be challenged at the initial stage. If there is a refusal to go into the merits, then it is considered a jurisdictional issue.[1] Therefore, it can be stated that for any jurisdictional issue to go into the values of the case, the issue should be raised at the preliminary issue of the arbitral proceedings so that an appeal can be made under Section 37 of the Arbitration and Conciliation Act, 1996. There have been many other precedents as well in which it has been stated that “the jurisdictional issue must be raised as a preliminary ground.”
There have been many cases upon which reliance has been made in determining the consideration of challenge under Section 16, like in Maharshi Dayanand University v. Anand Coop. L/C Society Ltd.[2] The Supreme Court judges held no mandatory need to decide jurisdictional challenge as a preliminary matter and can be with the final award. However, the decision was not considered good law.
Another impact made under Section 16 of the Arbitration and Conciliation Act, 1996, was after the 2015 Amendment to the said Act, which also talks about the stages of consideration of jurisdiction under the said act. The 2015 Amendment Act was introduced to make arbitration more friendly and cost-effective. It insisted on the speedy disposal of the arbitration matters for which, because of which, it emphasised dealing with the issue of jurisdiction at a preliminary stage.
[1] National Thermal Power Corpn. Ltd. v. Siemens Atkeingesellschaft, (2007) 4 SCC 451.
[2] (2007) 5 SCC 295.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre shall not be responsible for any errors caused due to human error or otherwise.
- challenging the competency of arbitral proceedings
- challenge under section 37
- the Tribunal to decide that they are not competent
