Timelines For Deciding Jurisdictional Objections Under §16 Of The Arbitration & Conciliation Act 1996: Surender Kumar Singhal V Arun Kumar Bhalotia1

§16 of the Act provides that a Tribunal is empowered to decide questions relating to its own jurisdiction. §16(5) of the Act provides that a Tribunal "shall decide on a plea" regarding its jurisdiction, but does not say when jurisdictional objections have to be decided, and the timing issue has recently been clarified by the Delhi High Court.

The Conundrum

The Supreme Court had held that jurisdictional questions have to be decided "as a preliminary ground"2 and "in the first instance"3. Various High Courts4 have interpreted this to mean that a jurisdictional question can be decided after the evidence stage but before the final award is pronounced.

The Delhi High Court Decision

The Delhi High Court has held that jurisdictional questions are to be decided at the earliest and with a sense of urgency. Accepting that evidence may be required in some cases, the Court has formulated the following guidelines for when jurisdictional questions should be decided:

  1. If the jurisdictional question can be decided based on admitted documents, then the Tribunal should decide the objection at inception.
  1. If the Tribunal thinks that evidence is required, the objection should be decided after leading evidence limited to the jurisdictional question.
  1. If the Tribunal thinks that detailed evidence, both written and oral, is required, then the Tribunal should decide the jurisdictional question after the evidence stage but before pronouncing the Award.

Conclusion

The judgment seeks to curb instances where Tribunals mechanically defer a decision on jurisdictional objections until the conclusion of the trial. The judgment seeks to ensure that parties having jurisdictional objections do not have to spend costs on long drawn legal proceedings before their jurisdictional objection is decided.

Footnotes

1 Decision dated 25 March 2021 by the Delhi High Court in CM(M) 1272/2019 & CM APPL 3560/2019

2 McDermott International Inc v Burn Standard Co Ltd & Ors (2006) 11 SCC 181

3 A Ayyasamy v A Paramasivam & Ors 2016 SCC OnLine SC 1110

4 Raj International v Tripura Jute Mills Ltd 2008 SCC Online Gau 333, Shri Pankaj Arora v AVV Hospitality OMP (T) (Comm) 32/2020 decided on 20 July 2020

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