{"id":230635,"date":"2008-07-08T00:00:00","date_gmt":"2008-07-07T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/605007-through-its-power-of-vs-ms-superpack-on-8-july-2008"},"modified":"2015-06-10T00:13:00","modified_gmt":"2015-06-09T18:43:00","slug":"605007-through-its-power-of-vs-ms-superpack-on-8-july-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/605007-through-its-power-of-vs-ms-superpack-on-8-july-2008","title":{"rendered":"605007; Through Its Power Of vs M\/S. Superpack on 8 July, 2008"},"content":{"rendered":"
Bombay High Court<\/div>\n
605007; Through Its Power Of vs M\/S. Superpack on 8 July, 2008<\/div>\n
Bench: Anoop V.Mohta, C. L. Pangarkar<\/div>\n
                                            1\n\n              IN THE HIGH COURT OF JUDICATURE AT BOMBAY\n                               NAGPUR BENCH, NAGPUR.\n\n\n\n\n                                                                               \n               LETTERS PATENT APPEAL NOS. 212\/08 & 213\/08\n\n\n\n\n                                                       \n                (1) LETTERS PATENT APPEAL NO. 212 OF 2008\n\n    M\/s. Sandip Industries, a\n    partnership concern, duly registered\n\n\n\n\n                                                      \n    under the Indian Partnership Act,\n    having its registered office at No.7,\n    Kurunji Street, Bharati Nagar, RK\n    Nagar, Ariyankuppam, Pondicherry-\n\n\n\n\n                                           \n    605007; through its Power of\n    Attorney Holder Mr. R.S. Gargig\n    S\/o Shiv Kumar Garg, r\/o 47, 3rd\n    Cross, Ananda Ranga Pillai Nagar,\n    Pondicherry-605008.                         ....    APPELLANT.\n                               \n              ....Versus....\n\n    1. M\/s. Superpack, A division of\n            \n\n\n       Bajaj Steel Industries Limited,\n       Imambada Road, Nagpur,\n         \n\n\n\n    2. Shri Ashok Chandak, Arbitrator\n       appointed, aged - Major, Occupation:\n\n\n\n\n\n       Chartered Accountant, Registered\n       Office at - 205, Ghatate Chambers,\n       Panchsheel Square, Nagpur-12.        ....        RESPONDENTS.\n\n\n\n\n\n                (2) LETTERS PATENT APPEAL NO. 213 OF 2008\n\n    M\/s. Jalan Industrial Corporation, a\n\n\n\n\n                                                       ::: Downloaded on - 09\/06\/2013 13:34:41 :::\n                                               2\n\n    partnership concern, duly registered\n    under the Indian Partnership Act,\n    having its registered office at Todi\n    Corner, 32, Ezra Street, 7th Floor,\n\n\n\n\n                                                                                 \n    Kolkata; through its Power of\n    Attorney Holder Mr. R.S. Garg\n\n\n\n\n                                                         \n    S\/o Shiv Kumar Garg, r\/o 47, 3rd\n    Cross, Ananda Ranga Pillai Nagar,\n    Pondicherry-605008.                           ....    APPELLANT.\n\n\n\n\n                                                        \n              ....Versus....\n\n    1. M\/s. Superpack, A division of\n       Bajaj Steel Industries Limited,\n\n\n\n\n                                            \n       Imambada Road, Nagpur,\n                               \n    2. Shri Ashok Chandak, Arbitrator\n       appointed, aged - Major, Occupation:\n                              \n       Chartered Accountant, Registered\n       Office at - 205, Ghatate Chambers,\n       Panchsheel Square, Nagpur-12.        ....          RESPONDENTS.\n            \n\n\n    Mr. R.S. Sundaram, learned Counsel for the appellants,\n         \n\n\n\n    Mr. Shyam Dewani, learned Counsel for respondent no.1.\n\n                          CORAM: ANOOP V. MOHTA & C.L. PANGARKAR, JJ.\n\n\n\n\n\n                          DATED:    JULY 8, 2008.\n\n    JUDGMENT (PER ANOOP V. MOHTA, J.)\n<\/pre>\n
               These are the appeals under Clause 15 of the Letters Patent Act<\/p>\n
    whereby a challenge is made to a common order passed by the Single Judge of<\/p>\n
                                                         ::: Downloaded on – 09\/06\/2013 13:34:41 :::<\/span>
\n                                                3<\/span><\/p>\n
    this Court in Writ Petition No. 3559\/07 & 3563\/07 dated 3.4.2008, that<\/p>\n
    resulted into confirmation of the order passed by the Arbitrator whereby an<\/p>\n
    application under Section 16(1) of the Arbitration & Conciliation Act, 1996<\/p>\n
    (“Arbitration Act” for short) has been rejected by holding that there exists an<\/p>\n
    arbitration clause in the agreement and the matter need not be referred to the<\/p>\n
    Civil Court for any such decision; the appointment of the Arbitrator is as per<\/p>\n
    agreement and lastly, the Arbitrator has jurisdiction to decide the present<\/p>\n
    dispute between the parties.\n<\/p>\n
    1)<\/p>\n
               The appellant, therefore, preferred Writ Petition No 3559\/07.             On<\/p>\n
    identical circumstances, there is another Writ Petition No. 3563\/07 filed by the<\/p>\n
    appellant in Letters Patent Appeal No. 213\/08. As the issues involved are<\/p>\n
    common and as the impugned judgment passed by the learned Single Judge is<\/p>\n
    also common, we are disposing of these two appeals together.\n<\/p>\n
    2)         The basic clauses of agreement\/agreements dated 21.4.2005 are as
\n    under :-\n<\/p>\n
                    “12.1 Clause-G :- It is also hereby agreed between the<\/p>\n
         representatives and the principal that in case, and if any, dispute or<\/p>\n
         difference arises between them in relation to and in connection with,<\/p>\n
                                                         ::: Downloaded on – 09\/06\/2013 13:34:41 :::<\/span>
\n                                                4<\/span><\/p>\n
         this agreement or about any of its term or its interpretation, than the<\/p>\n
         said dispute will be referred to the sole arbitrator appointed by the<\/p>\n
         Principal and the venue of arbitration will be only at Nagpur. The<\/p>\n
         decision of the sole arbitrator will be binding on the representative<\/p>\n
         and the principal.\n<\/p><\/blockquote>\n
                    12.2 Clause-H-Jurisdiction :-         The parties hereto<\/p>\n
         unconditionally and irrevocably agree to submit to the exclusive<\/p>\n
         jurisdiction of the competent court in Nagpur only with regard to any<\/p>\n
         question or any matter arising out of this agreement and any other<\/p>\n
         document that may be executed by the parties hereto or any of them<\/p>\n
         in pursuance hereof or assign herefrom.”\n<\/p><\/blockquote>\n
    3)         Section 16 as relevant of Arbitration Act is reproduced as under :-\n<\/p>\n
                     “16. Competence of arbitral tribunal to rule on its
\n         jurisdiction:-\n<\/p><\/blockquote>\n
         1) The arbitral tribunal may rule on its own jurisdiction, including<\/p>\n
            ruling on any objections with respect to the existence or validity<\/p>\n
            of the arbitration agreement, and for that purpose, —\n<\/p><\/blockquote>\n
               a) an arbitration clause which forms part of a contract shall be<\/p>\n
               treated as an agreement independent of the other terms of the<\/p>\n
                                                          ::: Downloaded on – 09\/06\/2013 13:34:41 :::<\/span>
\n                                          5<\/span><\/p>\n
         contract; and<\/p>\n<\/blockquote>\n
         b) a decision by the arbitral tribunal that the contract is null<\/p>\n
         and void shall not entail ipso jure the invalidity of the<\/p>\n
         arbitration clause.\n<\/p><\/blockquote>\n
    2) A plea that the arbitral tribunal does not have jurisdiction shall<\/p>\n
      be raised not later than the submission of the statement of<\/p>\n
      defence; however, a party shall not be precluded from raising<\/p>\n
      such a plea merely because that he has appointed, or participated<\/p>\n
      in the appointment of an arbitrator,<\/p>\n
    3) A plea that the arbitral tribunal is exceeding the scope of its<\/p>\n
      authority shall be raised as soon as the matter alleged to be<\/p>\n
      beyond the scope of its authority is raised during the arbitral<\/p>\n
      proceedings,<\/p>\n
    4) The arbitral tribunal may, in either of the cases referred to in<\/p>\n
      sub-section (2) of sub-section (3), admit a later plea if it<\/p>\n
      considers the delay justified.\n<\/p>\n
    5) The arbitral tribunal shall decide on a plea referred to in sub-\n<\/p>\n
      section (2) or sub-section (3) and, where the arbitral tribunal<\/p>\n
      takes a decision rejecting the plea, continue with the arbitral<\/p>\n
                                                   ::: Downloaded on – 09\/06\/2013 13:34:41 :::<\/span>
\n                                                  6<\/span><\/p>\n
               proceedings and make an arbitral award.\n<\/p>\n
         6) A party aggrieved by such an arbitral award may make an<\/p>\n
               application for setting aside such an arbitral award in accordance<\/p>\n
               with section 34.”\n<\/p>\n
    4)           A Constitutional Bench of the Apex Court in SBP & Co. .vs. Patel<\/p>\n
    Engineering Limited & another reported in AIR 2006 SC 450, while dealing<\/p>\n
    with Section 11(6) & (7) and Section 16 of the Arbitration Act has observed as<\/p>\n
    under :-\n<\/p>\n
                         “19. Section 16 is said to be the recognition of the<\/p>\n
           principle of Kompetenz-Komopetenz. The fact that the arbitral<\/p>\n
           tribunal has the competence to rule on its own jurisdiction and to<\/p>\n
           define the contours of its jurisdiction, only means that when such<\/p>\n
           issues arise before it, the Tribunal can and possibly, ought to<\/p>\n
           decide them. This can happen when the parties have gone to the<\/p>\n
           arbitral tribunal without recourse to Section 8 or 11 of the Act.\n<\/p><\/blockquote>\n
           But where the jurisdictional issues are decided under these<\/p>\n
           Sections, before a reference is made, Section 16 cannot be held to<\/p>\n
           empower the arbitral tribunal to ignore the decision given by the<\/p>\n
                                                           ::: Downloaded on – 09\/06\/2013 13:34:41 :::<\/span>
\n                                                    7<\/span><\/p>\n
            judicial authority or the Chief Justice before the reference to it was<\/p>\n
            made.         The competence to decide does not enable the arbitral<\/p>\n
            tribunal to get over the finality conferred on an order passed prior<\/p>\n
            to its entering upon the reference by the very statute that creates<\/p>\n
            it……..”\n<\/p><\/blockquote>\n
    5)           A minority view in so far as interpretation and scope of Section 16<\/p>\n
    of the Arbitration Act, agreeing with the above scope and provisions of Section<\/p>\n
    16 of the Arbitration Act is as under :-\n<\/p>\n
                            “94. Now, let us consider Section 16 of the Act. This<\/p>\n
           section is new and did not find place in the old Act of 1940. Sub-<\/p><\/blockquote>\n
           section (1) of that section enables the Arbitral Tribunal to rule on<\/p>\n
           its own jurisdiction. It further provides that the jurisdiction of the<\/p>\n
           tribunal includes ruling on any objections with respect to existence<\/p>\n
           or validity of the arbitration agreement. Sub-sections (2), (3) and<\/p>\n
           (4) lay down procedure of raising plea as to the jurisdiction of the<\/p>\n
           Arbitral Tribunal and entertaining such plea.           Sub-section (5)<\/p>\n
           mandates that the Arbitral Tribunal ‘shall decide’ such plea and,<\/p>\n
           ‘where the arbitral tribunal takes a decision rejecting the plea,<\/p>\n
                                                            ::: Downloaded on – 09\/06\/2013 13:34:42 :::<\/span>
\n                                          8<\/span><\/p>\n
    continue with the arbitration proceedings and make an arbitral<\/p>\n
    award’. Sub-section (6) is equally important and expressly enacts<\/p>\n
    that a party aggrieved by arbitral award may invoke Section 34 of<\/p>\n
    the Act for setting aside such award. The provision appears to<\/p>\n
    have been made to prevent dilatory tactics and abuse of immediate<\/p>\n
    right to approach the Court. If an aggrieved party has right to<\/p>\n
    move the Court, it would not have been possible to preclude the<\/p>\n
    Court from granting stay or interim relief which would bring the<\/p>\n
    arbitration proceedings to a grinding halt.\n<\/p>\n
                         ig                           The provisions of<\/p>\n
    Section 16(6) read with Section 5 now make the legal position<\/p>\n
    clear, unambiguous and free from doubt.\n<\/p>\n
               95. Section 16(1) incorporates the well-known doctrine<\/p>\n
    of Kompetenz-Kompetenz or competence de la competence.                     It<\/p>\n
    recognises and enshrines an important principle that initially and<\/p>\n
    primarily, it is for the Arbitral Tribunal itself to determine whether<\/p>\n
    it has jurisdiction in the matter, subject of course, to ultimate<\/p>\n
    Court-control.      It is thus a rule of chronological priority.\n<\/p>\n
    Kompetenz-Kompetenz is a widely accepted feature of modern<\/p>\n
    international arbitration, and allows the Arbitral Tribunal to decide<\/p>\n
                                                   ::: Downloaded on – 09\/06\/2013 13:34:42 :::<\/span>
\n                                          9<\/span><\/p>\n
    its own jurisdiction including ruling on any objections with respect<\/p>\n
    to the existence or validity of the arbitration agreement, subject to<\/p>\n
    final review by a competent court of law i.e. subject to Section 34<\/p>\n
    of the Act.\n<\/p>\n
                  96. Chitty on Contract (1999 edn.; p.802) explains the
\n    principle thus :\n<\/p>\n
                  English law has always taken the view that the arbitral<\/p>\n
    tribunal cannot be the final adjudication of its own jurisdiction.\n<\/p>\n
    The final decision as per the substantive jurisdiction of the tribunal<\/p>\n
    rests with the Court. However, there is no reason why the tribunal<\/p>\n
    should not have the power, subject to review by the Court, to rule<\/p>\n
    on its own jurisdiction. Indeed such a power (often referred to as<\/p>\n
    the principle of “Kompetenz-Kompetenz” has been generally<\/p>\n
    recognised in other legal systems. It had also been recognised by<\/p>\n
    English Law before the 1986 Act, but Section 30 of the Act put this<\/p>\n
    on a statutory basis. Unless otherwise agreed by the parties, the<\/p>\n
    arbitral tribunal may rule on its substantiative jurisdiction that is,<\/p>\n
    as to (a) whether there is valid arbitration agreement; (b) whether<\/p>\n
    the tribunal is properly constituted; and (c) what matters have<\/p>\n
    been submitted to arbitration in accordance with the arbitration<\/p>\n
                                                   ::: Downloaded on – 09\/06\/2013 13:34:42 :::<\/span>
\n                                          10<\/span><\/p>\n
    agreement. Any such ruling may be challenged by any arbitral<\/p>\n
    process of appeal or review or in accordance with the provisions of<\/p>\n
    Part I of the Act, notably by an application under Section 32 or by<\/p>\n
    a challenge to the award under Section 67 (emphasis supplied).\n<\/p>\n
                 Alan Redfern and Martin Hunter in their work on “Law<\/p>\n
    and Practice of International Commercial Arbitration”, (4th edn.),<\/p>\n
    (para 5-34) also said :\n<\/p>\n
                 When any question is raised as to the jurisdiction of the<\/p>\n
    Arbitral Tribunal, a two stage procedure is followed. At the first<\/p>\n
    stage, if one of the parties raises ‘one or more pleas concerning the<\/p>\n
    existence, validity or scope of the agreement to arbitrate, the ICC’s<\/p>\n
    Court must satisfy itself of the prima facie existence of such an<\/p>\n
    agreement (ICC Arbitration Rules 6(2).      If it is satisfied that such<\/p>\n
    an agreement exists, the ICC’s Court must allow the arbitration to<\/p>\n
    proceed so that, at the second stage, any decision as to the<\/p>\n
    jurisdiction of the Arbitral Tribunal shall be taken by the Arbitral<\/p>\n
    Tribunal itself…………\n<\/p>\n
                 From a practical standpoint, the rule is intended to<\/p>\n
    ensure that a party cannot succeed in delaying the arbitral<\/p>\n
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\n                                         11<\/span><\/p>\n
    proceedings by alleging that the arbitration agreement is invalid or<\/p>\n
    non-existent. Such delay is avoided by allowing the arbitrators to<\/p>\n
    rule on this issue themselves, subject to subsequent review by the<\/p>\n
    Courts, and by inviting the Courts to refrain from intervening until<\/p>\n
    the award has been made. Nevertheless, the interests of parties<\/p>\n
    with legitimate claims concerning the invalidity of the arbitration<\/p>\n
    agreement are not unduly prejudiced, because they will be able to<\/p>\n
    bring those claims before the arbitrators themselves and, should<\/p>\n
    the arbitrators choose to reject them, before the Courts thereafter.\n<\/p>\n
               The competence-competence rule thus concerns not<\/p>\n
    only the positive, but also the negative effects of the arbitration<\/p>\n
    agreement.”\n<\/p>\n
               98. In the instant case; according to the majority,<\/p>\n
    Section 16(1) only makes explicit what is even otherwise implicit,<\/p>\n
    namely, that the tribunal has the jurisdiction to rule its own<\/p>\n
    jurisdiction, ‘including ruling on any objections with respect to the<\/p>\n
    existence or validity of the arbitration agreement’.\n<\/p>\n
               109. As already indicated by me earlier, sub-section (1)<\/p>\n
    of Section 16 does not merely enable the Arbitral Tribunal to rule<\/p>\n
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\n                                                12<\/span><\/p>\n
           on its own jurisdiction, but requires it to continue arbitral<\/p>\n
           proceedings and pass an arbitral award. (Sub-setion (5) It allows<\/p>\n
           the aggrieved party to make an application for setting aside the<\/p>\n
           award in accordance with Section 34. (Sub-section (6). Thus, in<\/p>\n
           my judgment, Section 16 can be described as ‘self-contained Code’<\/p>\n
           as regards the challenge to the jurisdiction of Arbitral Tribunal. As<\/p>\n
           per the scheme envisaged by Parliament, once the Arbitral Tribunal<\/p>\n
           rules that it has jurisdiction, it will proceed to decide the matter on<\/p>\n
           merits and make an award.\n<\/p>\n
                                ig          Parliament has also provided the<\/p>\n
           remedy to the aggrieved party by enacting that he may make an<\/p>\n
           application under Section 34 of the Act. In the circumstances, the<\/p>\n
           proceedings cannot be allowed to be arrested or interference<\/p>\n
           permitted during the pendency of arbitration proceedings.”\n<\/p>\n
    6)         Even prior to this, the Supreme Court in M.S. Commercial & others<\/p>\n
    .vs. Calicut Engineering Works Limited (2004) 10 SCC 656, while<\/p>\n
    considering Section 16(5) and Section 34 of the Arbitration Act, in para 5<\/p>\n
    observed as follows :-\n<\/p>\n
                     “5. Once the arbitrator had taken a decision that there<\/p>\n
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\n                                                 13<\/span><\/p>\n
         was an arbitration agreement, then by virtue of sub-section (5) of<\/p>\n
         Section 16 of the Arbitration and Conciliation Act, the arbitrator<\/p>\n
         was bound to continue with the arbitration proceedings and make<\/p>\n
         an arbitral award. The only right that the petitioners now had was<\/p>\n
         to challenge the award under Section 34 of the Act after it is made.\n<\/p><\/blockquote>\n
         Once the arbitrator gave his decision, it was not open to the<\/p>\n
         petitioners to ask for cross-examination of the expert or at that<\/p>\n
         stage lead evidence of any other expert. The stage for doing that<\/p>\n
         had passed. As prior to the decision of the arbitrator they never<\/p>\n
         applied for cross-examination, they could not do so after the<\/p>\n
         decision.   This would not even be a ground of challenge under<\/p>\n
         Section 34 of the Act. However, we clarify that the above will not<\/p>\n
         mean that whilst challenging the arbitral award, if so challenged,<\/p>\n
         the petitioners cannot challenge the order rejecting their earlier<\/p>\n
         application, if in law they are entitled to do so.”\n<\/p><\/blockquote>\n
    7)        The Division Bench of Bombay High Court also in BASF Styrenics<\/p>\n
    Private Limited .vs. Offshore Industrial Construction Pvt. Ltd. reported in<\/p>\n
    AIR 2002 BOMBAY 289 while dealing with the provisions of Sections 16 & 17<\/p>\n
                                                           ::: Downloaded on – 09\/06\/2013 13:34:42 :::<\/span>
\n                                                 14<\/span><\/p>\n
    of the Arbitration Act observed in paras 10 & 11 as under :-\n<\/p>\n
                      “10. In our considered opinion, therefore, the scheme of<\/p>\n
           the Act is clear, and it is that if the arbitral Tribunal holds that it<\/p>\n
           has jurisdiction, such an order cannot be said to be illegal or<\/p>\n
           without jurisdiction at that stage, inasmuch as the competent<\/p>\n
           Legislature has conferred the power on arbitral Tribunal “to rule on<\/p>\n
           its own jurisdiction”. Hence, such an order can be challenged only<\/p>\n
           in the manner laid down in sub-sections (5) and (6) of S. 16, viz.\n<\/p><\/blockquote>\n
           after the arbitration proceedings are over and the award is made.\n<\/p><\/blockquote>\n
           If, on the other hand, it holds that it has no jurisdiction, an order<\/p>\n
           can be challenged under sub-section (2) of Section 37 of the Act.\n<\/p><\/blockquote>\n
                      11. Our attention in this connection, was invited by the<\/p>\n
           learned counsel for respondent No.1 to a decision of the Supreme<\/p>\n
           Court in Babar Ali .vs. Union of India (2002) 2 SCC 178. In that<\/p>\n
           case, the constitutional validity of sub-section (5) of Section 16 of<\/p>\n
           the Act was challenged on the ground that the appeal is provided<\/p>\n
           only after passing of an award, and if a party is deprived of right of<\/p>\n
           appeal on the ground that the Arbitrator has no jurisdiction, such a<\/p>\n
           provision would be ultra vires. The Court, however, observed that<\/p>\n
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\n                                                15<\/span><\/p>\n
           judicial review is available for challenging the award in accordance<\/p>\n
           with the procedure laid down in the Act, and only because the<\/p>\n
           question of jurisdiction of the Arbitrator is required to be<\/p>\n
           considered after the award is passed, and not at any penultimate<\/p>\n
           stage before an appropriate Court, it would not be a ground for<\/p>\n
           submitting that such an order is not subject to any judicial scrutiny.\n<\/p><\/blockquote>\n
           Accordingly, the Special Leave Petition filed by the appellant came<\/p>\n
           to be dismissed.”\n<\/p><\/blockquote>\n
    8)<\/p>\n
               Subsequently, the Supreme Court in McDermott                International<\/p>\n
    Inc. .vs. Burn Standard Co. Ltd. and others, reported in (2006) 11 SCC 181<\/p>\n
    while dealing with Sections 16, 34 & 37 has observed in para 51 as under :-\n<\/p>\n
           “51.    After the 1996 Act came into force, under Section 16 of the<\/p>\n
           Act the party questioning the jurisdiction of the arbitrator has an<\/p>\n
           obligation to raise the said question before the arbitrator. Such a<\/p>\n
           question of jurisdiction could be raised if it is beyond the scope of<\/p>\n
           his authority.   It was required to be raised during arbitration<\/p>\n
           proceedings or soon after initiation thereof.      The jurisdictional<\/p>\n
           question is required to be determined as a preliminary ground. A<\/p>\n
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\n                                                16<\/span><\/p>\n
            decision taken thereupon by the arbitrator would be the subject-\n<\/p><\/blockquote>\n
            matter of challenge under Section 34 of the Act. In the event the<\/p>\n
            arbitrator opined that he had no jurisdiction in relation thereto an<\/p>\n
            appeal thereagainst was provided for under Section 37 of the<\/p>\n
            Act.”\n<\/p><\/blockquote>\n
    The said principle has further been reiterated by Apex Court in National<\/p>\n
    Thermal Power Corporation Limited .vs. Siemens Atkeingesellschaft<\/p>\n
    reported in (2007) 4 SCC 451.\n<\/p>\n
    9)<\/p>\n
                Therefore, taking overall view of the scheme of Section 16, one<\/p>\n
    thing is very clear that Arbitrator has power to decide the applications with<\/p>\n
    regard to the existence of arbitration agreement and objection in respect of<\/p>\n
    jurisdiction.   The Arbitrator having once taken decision and rejected the<\/p>\n
    objection with regard to the jurisdiction & observed further that there is<\/p>\n
    existence of arbitration agreement between the parties and proceed<\/p>\n
    accordingly, such order cannot be challenged except the remedy as available<\/p>\n
    under Section 34 and or Section 37 of the Arbitration Act as referred above.\n<\/p>\n
    10)         The appellant\/petitioner in both these matters against the order<\/p>\n
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\n                                                 17<\/span><\/p>\n
    passed by the Arbitrator preferred separate two Writ Petitions by invoking<\/p>\n
    Article 226 of the Constitution of India.\n<\/p>\n
    11)         The learned Single Judge after considering the rival contentions and<\/p>\n
    the scheme of the Arbitration Act rightly upheld preliminary objection as raised<\/p>\n
    by the respondent as to the maintainability of Writ Petition against such order<\/p>\n
    passed by the Arbitrator.\n<\/p>\n
    12}         Another important facet is Section 5 of the Arbitration Act which is<\/p>\n
    reproduced as under :-\n<\/p>\n
                     “S. 5 Extent of judicial intervention.– Notwithstanding<\/p>\n
          anything contained in any other law for the time being in force, in<\/p>\n
          matters governed by this Part, no judicial authority shall intervene<\/p>\n
          except where so provided in this Part.”\n<\/p><\/blockquote>\n
    13}         It is clear that Section 5 applies to the matters governed by Part I.\n<\/p>\n
    Section 16 is part of this Part. The opening non-obstante clause therein clearly<\/p>\n
    indicates that it overrides provisions in any other statute. As a result, judicial<\/p>\n
    intervention is permissible only where it is specifically provided for in this part<\/p>\n
                                                           ::: Downloaded on – 09\/06\/2013 13:34:42 :::<\/span>
\n                                              18<\/span><\/p>\n
    (Shri Subhalaxmi Fabrics .vs. Chandralal Barodia\/Manu\/SC\/0231\/2005;\n<\/p>\n
    (2005) 10 SCC 704. The principal object of Section 5 is to promote and<\/p>\n
    encourage resolution of disputes expeditiously and less expensively. Especially<\/p>\n
    when there is an arbitration agreement, the Court’s intervention should be<\/p>\n
    minimal. (T. Anand Gajapatty Raju .vs. PVG Raju AIR 2000 SC 1886).\n<\/p>\n
    14}       In Kvaerner Cementation India Limited .vs. Bajranglal Agrawal :\n<\/p>\n
    2001 (3) RAJ 414, ‘S.C. again noted referring to Section 16(1) & (5) of this<\/p>\n
    Act the power to rule on its own jurisdiction including any objection with<\/p>\n
    respect to the existence or validity of the arbitration agreement and further<\/p>\n
    enable the Tribunal to continue with the arbitration proceedings and make an<\/p>\n
    award where it decides to reject the plea and continue with the arbitration<\/p>\n
    proceedings and make an award. Section 16 sub-clause (5) entitles a party<\/p>\n
    aggrieved by such an award to challenge it by an application for setting it<\/p>\n
    aside. As noted already, the Arbitrator\/Tribunal has the power to decide all<\/p>\n
    objections regarding the validity and existence of the arbitration agreement<\/p>\n
    coupled with the objection to the constitution of the Arbitral Tribunal as<\/p>\n
    subjected\/objected by the appellant in the present case (Richi Strips & Alloys<\/p>\n
    .vs. Tata South : (2004) 13 SCC 472).\n<\/p>\n
                                                        ::: Downloaded on – 09\/06\/2013 13:34:42 :::<\/span>
\n                                                19<\/span><\/p>\n
    15}        The Supreme Court judgment as cited by the learned Counsel<\/p>\n
    appearing for the appellant, i.e. Gas Authority of India Limited and another<\/p>\n
    .vs. Keti Construction (I) Ltd. and others reported in 2007(5) SCC 38 in<\/p>\n
    fact reiterated the said principle with further observation that the plea<\/p>\n
    regarding jurisdiction must be raised right at the beginning so that remedial<\/p>\n
    measures may be immediately taken and time and expenses involved in<\/p>\n
    hearing of the matter may be saved on the issue of proper constitution or<\/p>\n
    lacking in jurisdiction at earliest.   It is further stated that plea of lack of<\/p>\n
    jurisdiction must make out a strong case. The Supreme Court has observed<\/p>\n
    while dealing with Section 16 of the Arbitration Act that Arbitral Tribunal’s<\/p>\n
    authority under Section 16 is not confined to the width of its jurisdiction but<\/p>\n
    goes to the very root of its jurisdiction and further that the Arbitration Act<\/p>\n
    should be interpreted keeping in mind the UNCITRAL MODEL LAW and the<\/p>\n
    whole object and scheme of the Act is to secure expeditious results of disputes.\n<\/p>\n
    The judgment in no way supports the case of the appellants that in such case<\/p>\n
    party can agitate the issue or challenge the order of Tribunal in Civil Court<\/p>\n
    and\/or in writ jurisdiction as sought to be contended and as done in the<\/p>\n
    present case. The scheme of Section 5 read with Section 16 as elaborated<\/p>\n
    above no way permits the person like the appellants as the remedy so provided<\/p>\n
                                                          ::: Downloaded on – 09\/06\/2013 13:34:42 :::<\/span>
\n                                                 20<\/span><\/p>\n
    under Arbitration Act itself is an effective or alternative efficacious remedy<\/p>\n
    under the law. Therefore, no special case is made out by the appellant to<\/p>\n
    overlook the said principle and to interfere with the order passed by the<\/p>\n
    Tribunal under Article 226 of the Constitution of India.\n<\/p>\n
    16}         The conclusion in in SBP & Co. .vs. Patel Engineering Ltd. (supra)<\/p>\n
    with regard to Sections 16, 34 & 37 clinches the issue against the appellants,<\/p>\n
    viz.\n<\/p>\n
           “(vi) Once the matter reaches the Arbitral Tribunal or the sole<\/p>\n
           arbitrator, the High Court would not interfere with the orders<\/p>\n
           passed by the arbitrator or the Arbitral Tribunal during the course<\/p>\n
           of the arbitration proceedings and the parties could approach the<\/p>\n
           Court only in terms of Section 37 of the Act or in terms of Section<\/p>\n
           34 of the Act,<\/p>\n<\/blockquote>\n
           (ix) In a case where an Arbitral Tribunal has been constituted by<\/p>\n
           the parties without having recourse to Section 11(6) of the Act, the<\/p>\n
           Arbitral Tribunal will have the jurisdiction to decide all matters as<\/p>\n
           contemplated by Section 16 of the Act”.\n<\/p><\/blockquote>\n
                                                           ::: Downloaded on – 09\/06\/2013 13:34:42 :::<\/span>
\n                                                  21<\/span><\/p>\n
    17}        The order passed by the Arbitrator under Section 16, after giving<\/p>\n
    full opportunity and hearing both the parties is a judicial order. That itself is<\/p>\n
    not sufficient to interfere in writ jurisdiction under Article 226 of the<\/p>\n
    Constitution of India, as sought to be contended by the learned Counsel<\/p>\n
    appearing for the appellant, based on the decision of the Apex Court in M\/s.\n<\/p>\n
    SBP & Company (supra), to overlook the scheme of the Arbitration Act,<\/p>\n
    especially of Section 16 read with Section 5 as elaborated above. Section 16 is<\/p>\n
    a stage where a party before the Tribunal raised a plea of jurisdiction and\/or<\/p>\n
    competency. The said judgment in no way allows the parties like the appellant<\/p>\n
    to file Writ Petition against the order passed by the Arbitral Tribunal rejecting<\/p>\n
    the objection about the jurisdiction and existence of agreement. No writ can be<\/p>\n
    issued against such private Arbitral Tribunal. No public element is involved in<\/p>\n
    such private agreed commercial contract. The scheme of Arbitration Act itself<\/p>\n
    provides the remedy in such circumstances. Therefore also, the preliminary<\/p>\n
    objection as to the maintainability of Writ Petition was rightly decided against<\/p>\n
    the appellant by the learned Single Judge.\n<\/p>\n
    18}        Therefore, taking all this into account, there is no case made out to<\/p>\n
    interfere with the reasoning given by the learned Single Judge. Both these<\/p>\n
                                                          ::: Downloaded on – 09\/06\/2013 13:34:42 :::<\/span>
\n                                                22<\/span><\/p>\n
    Letters Patent Appeals are, therefore, dismissed.\n<\/p>\n
                JUDGE                                                       JUDGE.\n     J.\n\n\n\n\n                                                        \n                                                       \n                                             \n                               \n                              \n            \n         \n\n\n\n\n\n\n                                                        ::: Downloaded on - 09\/06\/2013 13:34:42 :::<\/span>\n <\/pre>\n","protected":false},"excerpt":{"rendered":"
Bombay High Court 605007; Through Its Power Of vs M\/S. Superpack on 8 July, 2008 Bench: Anoop V.Mohta, C. L. Pangarkar 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH, NAGPUR. LETTERS PATENT APPEAL NOS. 212\/08 & 213\/08 (1) LETTERS PATENT APPEAL NO. 212 OF 2008 M\/s. Sandip Industries, a partnership concern, duly […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[11,8],"tags":[],"class_list":["post-230635","post","type-post","status-publish","format-standard","hentry","category-bombay-high-court","category-high-court"],"yoast_head":"\n605007; Through Its Power Of vs M\/S. 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