1. Consultancy contract dispute; Arbitration clause required appointment of third arbitrator within thirty days; Parties challenged the constitution of the tribunal alleging lack of jurisdiction for delayed appointment. (Para 5 , 6 , 7 , 8 , 9 , 10 , 11 )
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2026 Supreme(SC) 249
SUPREME COURT OF INDIA
J.K. MAHESHWARI, ATUL S. CHANDURKAR, JJ.
Municipal Corporation of Greater Mumbai – Appellant
Versus
M/s R.V. Anderson Associates Limited – Respondent
Civil Appeal Nos. 3277-3278 of 2026 [Arising Out of SLP (C) Nos. 23846-23847 of 2025]
Decided On : 11-03-2026
Advocates appeared:
For the Appellant(s) : Ms. Asha Gopalan Nair, AOR
For the Respondent(s): Ms. Riddhi Sancheti, AOR Mr. Mukul Kulhari, Adv. Ms. Tanjul Sharma, Adv.
For the Appellant(s) : Ms. Asha Gopalan Nair, AOR
For the Respondent(s): Ms. Riddhi Sancheti, AOR Mr. Mukul Kulhari, Adv. Ms. Tanjul Sharma, Adv.
The court affirmed the validity of the arbitral tribunal's constitution and concluded that the party's failure to act within the stipulated timeframe amounted to a waiver of jurisdictional objections.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 34 and Section 37 - Jurisdiction challenge to the arbitral tribunal due to improper constitution under Clause 8.3(b) of the arbitration agreement following the expiration of 30 days without further action from either party regarding arbitrator appointment. (Paras 3, 4, 21, 24)
(B) The arbitral tribunal’s decision that the agreement's language permitted continued action past the 30-day period, thus affirming its validity and waiver of jurisdictional challenges by the Municipal Corporation of Greater Mumbai due to inaction. (Paras 21-68)
Facts of the case:
The case involved disputes arising from a consultancy agreement related to sewerage operations, with arbitration invoked after payment disputes. The Respondent triggered the arbitration clause on 09.08.2005.
Findings of Court:
The courts affirmed the tribunal's ruling and found no jurisdictional defects nor grounds for setting aside the arbitral award, emphasizing party conduct and agreement interpretation.
Issues: The main issues included the validity of the arbitral tribunal's constitution and the waiver of jurisdictional objections due to MCGM's conduct.
Ratio Decidendi: The apex court held that the tribunal was validly constituted, and that party conduct showed acquiescence, effectively waiving the right to challenge the tribunal’s composition after engaging in arbitration.
Result: Appeals dismissed.
Legal Category Hierarchy
- alternative dispute resolution
- practice and procedure
Table of Contents
2. Appellant argued the tribunal was coram non judice due to delayed appointment; Respondent contended the clause was enabling and the objection was waived by conduct and participation. (Para 25 , 26 )
3. Tribunal composition provisions were enabling, not restrictive; failure to approach designated authority within specified time did not nullify the arbitrators' inherent power to complete the panel's constitution. (Para 29 , 30 , 31 , 34 , 35 )
4. Active participation in arbitration proceedings without timely objection regarding tribunal constitution constitutes waiver of the right to challenge jurisdiction under the Arbitration and Conciliation Act. (Para 59 , 60 , 64 , 66 , 67 )
5. Appeals dismissed; findings of the High Court and Arbitral Tribunal confirming valid constitution and lack of jurisdictional defect upheld. (Para 68 )
6. Can an arbitration clause requiring the appointment of a presiding arbitrator within a fixed timeframe be interpreted as a rigid, restrictive condition?
No. The court held such clauses are generally enabling. The failure to appoint within the stipulated period does not automatically render the arbitral tribunal coram non judice, provided the clause does not explicitly state otherwise or deny the co-arbitrators the power to act thereafter. (Para 29 , 30 , 31 , 34 , 35 )
7. Does participation in arbitration proceedings without raising a timely objection to tribunal composition amount to a waiver of the right to challenge jurisdiction?
Yes. Statutory waiver under Section 4 and the doctrine of acquiescence prevent a party from challenging tribunal composition if they have actively participated or remained silent despite knowing of the alleged non-compliance, thereby attempting to treat jurisdictional issues as a tactical device after the proceedings have advanced. (Para 59 , 60 , 66 , 67 )
8. Is the filing of a Section 16 application sufficient to regularize a party's prior conduct and silence regarding tribunal constitution?
No. While Section 16 permits jurisdictional challenges before the statement of defence, a party's long-standing acquiescence, failure to protest on multiple occasions, and active participation in the proceedings establish a clear intent that precludes the party from subsequently relying on the appointment procedure as a ground to invalidate the entire process. (Para 64 , 66 , 67 )
JUDGMENT :
J.K. MAHESHWARI, J.
1. Leave granted.
2. The instant appeals are directed against the judgment dated 04.07.2025 of the High Court of Bombay (hereinafter referred to as “High Court”) in Arbitration Appeal (L) No. 4339 of 2024 with Interim Application (L) No. 7312 of 2024.
3. By the impugned judgment, the High Court dismissed the appeal of the Appellant-Municipal Corporation of Greater Mumbai (hereinafter referred to as “MCGM”) under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “1996 Act”) and confirmed the judgment and order dated 19th and 20th of October, 2022 of the learned Single Judge in Arbitration Petition No. 84 of 2012 dismissing the application filed under Section 34 of the 1996 Act by MCGM for setting aside the award dated 05.06.2010 of a three-member Arbitral Tribunal.
4. The challenge made in the proceedings of Section 34 was threefold - improper constitution of the tribunal, limitation and interest. However, before us, the Appellant has confined their arguments only to the question of lack of jurisdiction due to improper constitution of the tribunal. As such, our examination of the facts of the case is confined to the question of validity of constitution of the tribunal.
FACTS
5. The facts shorn of unnecessary details are that the MCGM had floated a tender and invited proposals for ‘Consultancy Services to Upgrade Sewerage Operations & Maintenance Services’. The scope of work of the contract was for providing consultancy in upgrading the sewage and sewerage handling facilities, operations and routine maintenance protocols. This was a World Bank funded project and the Respondent turned out to be the successful bidder in association with PHE Consultants, Mumbai. Pursuant thereto, an agreement dated 18.09.1995 (hereinafter referred to as the “Agreement”) was entered into between the MCGM and M/s R.V. Anderson Associates Ltd. which is an engineering firm based out of Canada.
6. The stipulated duration for completion of the work under the Agreement was 72 months and the contract was designed to be implemented in stages. The work under the contract was completed on 20.06.2001 and a final report was submitted by the Respondent to the MCGM. At that stage, a dispute arose in respect of payment of outstanding dues. A meeting was held on 24.10.2002 where the Respondent’s claims were discussed and rejected by MCGM except to make partial payments on 17.02.2004.
7. When things stood as thus, on 09.08.2005, the Respondent invoked the arbitration clause as contained in the Agreement. Vide communication dated 09.08.2005, received by the MCGM on 14.09.2005, the Respondent invoked the arbitration clause, particularly clause 8.3(b) of the Agreement and appointed Hon’ble Mr. Justice S.M. Jhunjhunwala (Retd.) as their nominee arbitrator. On 07.10.2005, the MCGM appointed Mr. Sharad Upasani, former IAS officer as their nominee arbitrator.
8. On 04.11.2005, a meeting was held between the Appellant and the Respondent, where the parties discussed about exploring a possibility of conciliation or mediation. In reference to the said meeting, another letter dated 08.11.2005 was sent by the Respondent to MCGM, seeking to explore non-binding conciliation or mediation and in the meanwhile, on confirmation by the MCGM, the arbitration proceedings be put in abeyance. The said letter dated 08.11.2005 was also marked to Justice Jhunjhunwala (Retd.) and Mr. Upasani. The MCGM, by writing letter dated 07.01.2006 acknowledged the intention of the Respondent to keep arbitration proceedings in abeyance and to start conciliation proceedings.
9. After a while, the Respondent wrote letters dated 12.02.2006 and 27.02.2006 to the MCGM, requesting to participate in the conciliation. It appears from the record that steps were not taken by the parties to explore the possibility of settlement and nothing was materialized. On 15.12.2006, MCGM addressed a letter to Mr. Upasani, informing him that there was no conciliation
