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2025 Supreme(SC) 1527
SUPREME COURT OF INDIA
PAMIDIGHANTAM SRI NARASIMHA AND JOYMALYA BAGCHI, JJ.
M/S Sew Infrastructure Ltd. - Appellant
Versus
The Government of Chhattisgarh - Respondent
Civil Appeal No. 6423 of 2025 [@ SLP(C) No.23741 of 2024]
Decided on : 07-05-2025
Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 34 and 37 - Writ under Article 226 - Dispute involving contract for construction - High Court dismissed writ for lack of jurisdictional challenge during arbitration - Court lays down that jurisdiction must be raised early to prevent prolonged litigation and to afford clarity on statutory remedies - Previous judgments reaffirmed that jurisdictional objections not raised timely may not annul an award. (Paras 3, 6, 9, 12)
(B) Jurisdiction in Arbitration - The grounds of jurisdiction can be raised at any stage, with emphasis on timeliness to minimize litigation. (Paras 5, 10)
Facts of the case:
The appellant entered into an agreement with the State of Chhattisgarh for construction, seeking arbitration for disputes arising from the contract. The State later contested the arbitration award on jurisdictional grounds that were not raised during the proceedings.
Findings of Court:
The Commercial Court's order setting aside the award on jurisdiction was overturned; the appellant is directed to pursue the appeal under Section 37 on merits.
Issues: The main issues were the jurisdictional objections regarding the applicability of the State Act and the appropriate remedies for contesting the arbitration award.
Ratio Decidendi: The court asserted that when jurisdictional objections are not raised at the appropriate time, they cannot result in the annulment of an award, thereby ensuring essential clarity in contractual situations.
Result: Appeal allowed, upholding alternative remedy under Section 37.
| Table of Content |
|---|
| 1. award issues arising from arbitration agreements (Para 3 , 4) |
| 2. jurisdictional objections must be raised timely (Para 5 , 12) |
| 3. writ petition dismissed due to alternative remedy (Para 7 , 8) |
| 4. clarity on jurisdictional issues is crucial (Para 9 , 10 , 11) |
| 5. reinstatement of original petition for merits hearing (Para 13 , 14) |
ORDER :
1. Leave granted.
2. This appeal is against the judgment and order passed by the High Court of Chhattisgarh at Bilaspur in Writ Petition Civil No. 1142/2019 dated 05-08-2024.
3. The appellant before us, a corporate entity, entered into an agreement with the State of Chhattisgarh on 20.12.2007 for construction of concrete dam(s) and allied work. As disputes arose during the course of execution of the contract, in view of the arbitration clause in the agreement, the appellant sought adjudication and determination of the disputes through arbitration under the Arbitration and Conciliation Act, 1996[Hereinafter referred to as the 'Act'.].
4. Sole arbitrator came to be appointed on 05.11.2015. The arbitral proceedings culminated in the passing of the award on 30.03.2017. It is not in dispute that before the Arbitral Tribunal the respondent-State had not taken any objection about the applicability of the Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983, (hereinafter referred to as the 'State Act').
5. However, when the State challenged the award on jurisdictional ground under Section 34 of the Act, that the State Act alone applies, the Commercial Court by its order dated 05.12.2018 accepted the submissions and set aside the award. For this purpose, the Commercial Court relied on the decision in Lion Engineering Consultants v. State of Madhya Pradesh and Ors , (2018) 16 SCC 758 that a ground of jurisdiction can be raised at any stage.
6. Questioning the correctness of the decision of the Commercial Court, the appellant filed a writ petition under Article 226, which came to be dismissed by the High Court by the order impugned before us on the ground of alternative remedy under Section 37 of the Act.
7. In the order impugned, the High Court held as under:
"16. In the case at hand, the Commercial Court while exercising the Jurisdiction under Section 34 of the Act of 1996 has allowed the application under Section 34 of the Act of 1996 for the reasons assigned therein. The Court in an appeal under Section 37 of the Act of 1996 can very well confirm the award of arbitration, set aside the order passed under Section 34 or reject the application under, Section 34 or appeal under Section 37.
17. In the case at hand, as per case of petitioner, the Sole Arbitrator passed an award in its form and it is the respondent who approached the Commercial Court by filing proceeding under Section 34 of the Act of 1996 and therefore, the grounds on which this petition is filed can very well be considered by the Court in an appeal under Section 37 of the Act of 1996.
18. For the foregoing discussion, in the facts of the case and decisions of Hon'ble Supreme Court in case of Whirlpool Corporation (supra), Nivedita Sharma (supra), Harbanslal Sinha (supra) and Commercial Steel Limited (supra), in the opinion of this Court, writ petition is not maintainable as the petitioner is having efficacious alternate remedy of appeal under Section 37 of the Act of 1996.
19. Accordingly, writ petition is liable to be and is hereby dismissed, reserving liberty with the petitioner to avail the remedy available, in accordance with law."
8. Mr. Harsh Parashar, learned advocate appearing for the appellant submitted that the respondent-State has never objected to the jurisdiction of the arbitrator in view of the State Act. On the other hand, Mr. Karan Khetnai has submitted that the jurisdictional question can be taken up at any stage.
9. We have been encountering cases where the States such as Madhya Pradesh and Chhattisgarh, governed by special State legislations for resolution of disputes through arbitration are taking contradictory a
