INDIA Law and Practice Contributed by: Amit Mishra and Mitakshara Goyal, Svarniti Law Offices
to any factors that might affect their ability to devote adequate time to the arbitration, including the abil - ity to complete the proceedings within the prescribed timeframe. The law offers guidance on what circumstances may give rise to such doubts. It lists specific relationships and situations that render an individual ineligible to serve as an arbitrator, regardless of any agreement to the contrary. However, parties may waive such ineli - gibility after a dispute has arisen, as in the case of Bhadra International India v Airports Authority of India , where the Delhi High Court upheld an arbitral award passed by a unilaterally appointed arbitrator, citing the parties’ written waiver under Section 12 (5) of the Arbitration Act. Section 16 of the ACA expressly embodies the prin - ciple of competence-competence in Indian arbitra - tion law, which empowers arbitral tribunals seated in India to determine their own jurisdiction, including the authority to rule on objections regarding the existence or validity of the arbitration agreement itself. In prac - tice, this means that the arbitral tribunal has the first opportunity to decide whether it has the competence to hear the dispute, thereby minimising early judicial intervention and streamlining the arbitration process. 5.2 Circumstances for Court Intervention Under Indian arbitration law, courts are generally not permitted to intervene in questions of jurisdiction until the arbitral tribunal has first considered and ruled on the matter. This approach is rooted in the principle of minimal judicial interference, ensuring that the tribunal – as the forum chosen by the parties – has the primary authority to decide its own jurisdiction. If a party is dissatisfied with the tribunal’s decision on jurisdiction, an appeal can be made under Section 37 (2)(a) of the ACA. In the landmark case of SBP & Co. v Patel Engineering Ltd. , the Supreme Court empha - sised that judicial intervention in arbitration proceed - ings should be strictly limited to the specific situations provided for in the Act. The Court clarified that not 5. Jurisdiction 5.1 Challenges to Jurisdiction
every order of the arbitral tribunal is open to challenge under the writ jurisdiction of the High Courts (Articles 226 and 227 of the Constitution). Instead, the Act pro - vides a clear scheme: only certain orders are appeal - able under Section 37, and other grievances may be raised only after the final award is made, through an application to set aside the award under Section 34. 5.3 Timing of Challenge Parties cannot immediately approach the courts to challenge the arbitral tribunal’s jurisdiction once arbi - tration begins. Under the principle of competence- competence, the tribunal must first decide on its own jurisdiction. Section 16 of the ACA provides that a party must raise any challenge to jurisdiction before the tribunal. In M/S Vidyawati Construction Company v Union of India , the Supreme Court held that a party cannot challenge an arbitral tribunal’s jurisdiction after filing its statement of defence under Section 16 (2) of the Arbitration Act. 5.4 Standard of Judicial Review for Jurisdiction/Admissibility The standard of judicial review for questions of admis - sibility and jurisdiction is not de novo. Courts do not examine the merits of the case; rather, they rely on the reasoning provided by the arbitral tribunal when deciding such questions. If the court finds that the tribunal’s reasoning is unsound, it may intervene. However, under normal circumstances, once the arbitrator has ruled on jurisdiction under Section 16 of the ACA, the court will usually wait for the final arbitral award before entertaining any challenge. This approach upholds the principle of minimal judicial intervention in arbitral proceedings. 5.5 Breach of Arbitration Agreement Indian courts generally show a strong reluctance to permit court proceedings that are initiated in breach of a valid arbitration agreement. If a party files a suit in court despite an arbitration clause being in effect, the opposing party must promptly apply to refer the dis - pute to arbitration before submitting its first substan - tive statement in court. If the court finds, on a prima facie basis, that a valid arbitration agreement exists and the dispute is arbitrable, it is required to refer the parties to arbitration and stay the court proceedings.
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