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.

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 ex