There might be certain occasions when the Arbitral Tribunal may lose the competence to rule on its jurisdiction.
Section 11(6) of the Arbitration and Conciliation Act expresses that a party may request the Chief Justice or his designate to take required steps under an appointment procedure consented by the parties, one of them fails to act as required under the method, or the parties or the two arbitrators fail to arrive at a contract expected of them under the procedure, or an individual or institution fails to perform a function depended on him under such process. Also, section 11(7) states that a decision taken by the Chief justice or his designate under section 11(4), section 11(5) or section 11(6) will be conclusive. This implies that the arbitral tribunal can't investigate the question of its own jurisdiction when the Chief Justice has investigated it before.
In the landmark judgement of Konkan Railway Corporation Ltd. vs. Rani Construction Pvt. Ltd. it was held by the court that the constitution of the Arbitral Tribunal by the Chief Justice might be challenged before the Arbitral Tribunal on the ground of being in violation of the Act. It was observed by the court:
"It may likewise be that in a given case the Chief Justice or his designate may have nominated the arbitrator though the time of thirty days had not lapsed. Assuming this is the case, the Arbitral Tribunal would have been improperly constituted and be without jurisdiction. It would then be available to the aggrieved party to require the Arbitral Tribunal to rule on its jurisdiction. Section 16 states that the Arbitral Tribunal may rule on its own jurisdiction.”
However, in the case of SBP and Co. vs. Patel Engineering Ltd. it was held that the Arbitral tribunal could not rule on its own jurisdiction once it had been appointed by the Chief Justice. It was held that:
"The inquiry, with regards to sub-section (7) of Section 11 is, what is the extent of the right conferred on the Arbitral Tribunal to rule upon its own jurisdiction and the existence of the arbitration clause, visualized by section 16(1) when the Chief Justice or the person assigned by him had designated an arbitrator after satisfying himself that the conditions for the exercise of power to appoint an arbitrator are present in the case. Prima facie, it is difficult to state that regardless of the decision of the Chief Justice, the Arbitral Tribunal can in any case go behind that decision and rule on its own jurisdiction or on the presence of an arbitration clause.
Section 16 can't be held to empower the Arbitral Tribunal to overlook the decision given by the judicial authority or the Chief justice before the reference to it was made. The capability to decide doesn't empower the Arbitral tribunal to get over the conclusiveness conferred to an order passed preceding to its entering upon the reference by the exceptional provisions that makes it."
This case overruled the judgment given in the case of Konkan Railway Corporation Ltd. vs. Rani Construction Pvt. Ltd. Consequently, we see that if the Chief Justice or designate has looked into the existence of the arbitration clause and on its jurisdiction cannot notice the question of its jurisdiction. It would in such a case be barred from investigating the matter of its jurisdiction.