High Court Of Delhi
UNION OF INDIA - Appellant
Versus
EAST COAST BOAT BUILDERS AND ENGINEERS LIMITED - Respondent
Decided On : 08/25/1998
Held:
The legislature did not provide appeal against the order under Section 16(5) where the arbitral tribunal takes a decision rejecting the plea that the arbitral tribunal has no jurisdiction. The intention appears to be that in such case, the arbitral tribunal shall continue with the arbitral proceedings and make an award without delay and without being interfered in the arbitral process at that stage by any court in their supervisory role.
( 1 ) THIS petition filed by Industrial Credit and Investment Corporation of India Limited against M/s. East Coast Boat Builders and Engineers Ltd. is under Section 34 (2) (iv) of the Arbitration and Conciliation Act, 1996 (hereinafter for short REFERRED TO to the Act ) for setting aside an order dated 11. 6. 1998.
( 2 ) BY the aforesaid order, the learned arbitral tribunal has ruled that the disputes raised in the claim petition are arbitrable. Feeling aggrieved with the order and treating the same as an interim award, the petitioner has challenged it under Section 34 of the Act. Notice in this petition was issued for 7. 8. 1998. On that date Mr. Shiv Dayal, Senior Advocate appeared for respondent No. 1 and raised a preliminary objection about maintainability of this petition. Accordingly, learned counsel, for parties were heard on the point of maintainability of this petition.
( 3 ) CHALLENGE to maintainability of the petition is on grounds, inter alia, that under the scheme of Arbitration and Conciliation Act, 1996, if the arbitral tribunal under Section 16 of the Act rejects the plea of a party that the arbitral tribunal does not have jurisdiction, the Courts cannot interfere with the arbitral proceedings at that stage and the only remedy left with the affected party is to challenge the ultimate award which may be made by the arbitral tribunal after continuing with the arbitral proceedings. Mr. Shiv Dayal, Senior Advocate invited my attention to the provisions of Sections 5, 16 and 37 of Act. The relevant provisions of these Sections read as follows :- "5. Extent of judicial intervention- Notwithstanding anything contained in any other law for the time being in force, in matters governed by this part, no judicial authority intervene except where so provided in this part. 16. Competence of arbitral tribunal to rule on its jurisdiction-- (1) The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose,-- (a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and (b) a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the validity of the arbitration clause. (2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence; however, a party shall not be precluded from raising such a plea merely because that he has appointed, or participated in the appointment of, an arbitrator. (5) The arbitral tribunal shall decide on a plea REFERRED TO to in sub-section (2) or sub-section (3) and, where the arbitral tribunal takes a decision rejecting the plea, continue with the arbitral proceedings and make an arbitral award. (6) A party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with Section 34. 37. Appealable orders-- (1) An appeal shall lie from the following orders (and from no others) to the court authorised by law to hear appeals from original decrees of the Court passing the order, namely :- (a) granting or refusing to grant any measure under Section 9; (b) setting aside or refusing to set aside an arbitral award under Section 34. (2) An appeal shall also lie to a court from an order of the arbitral tribunal-- (a) accepting the plea REFERRED TO to in sub-section (2) or sub-section (3) of Section 16; or (b) granting or refusing to grant an interim measure under Section 17. " @btindent = In order to substantiate his contentions Mr. Shiv Dayal also REFERRED TO to the definitions of the terms "arbitral award", and "court" which are given in section 2 (1) (c) and (e) of the Act. These definitions read as follows :- 2 (1) (c) " arbitral award" includes an interim award. (e) "court" means the principal Civil Court of original jur
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