Arbitration and Conciliation Act Section 16 — Competence of arbitral tribunal to rule on its jurisdiction

CHAPTER IV — Jurisdiction of arbitral tribunals

Civil

Summary

Sub-section (1) lets the arbitral tribunal decide on its own jurisdiction, including any objections about whether the arbitration agreement exists or is valid. For this purpose, clause (a) states that an arbitration clause that is part of a larger contract is treated as a separate agreement, independent of the other terms of that contract. Clause (b) states that if the tribunal decides the contract itself is null and void, that decision does not automatically make the arbitration clause invalid.

Sub-section (2) says that a plea that the tribunal does not have jurisdiction must be raised no later than when the party submits its statement of defence. However, a party is not barred from raising such a plea just because it appointed, or took part in appointing, an arbitrator.

Sub-section (3) says that a plea that the tribunal is exceeding the scope of its authority must be raised as soon as the matter that is alleged to be beyond the tribunal's authority comes up during the arbitral proceedings.

Sub-section (4) allows the tribunal to admit a later plea, in either of the situations mentioned in sub-section (2) or sub-section (3), if the tribunal considers the delay to be justified.

Sub-section (5) requires the tribunal to decide on a plea referred to in sub-section (2) or sub-section (3). If the tribunal rejects the plea, it must continue with the arbitral proceedings and make an arbitral award.

Sub-section (6) states that a party who is aggrieved by such an arbitral award may apply to have that award set aside in accordance with section 34.

Official Text

(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 invalidity 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.

(3) A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings.

(4) The arbitral tribunal may, in either of the cases referred to in sub-section (2) or sub-section (3), admit a later plea if it considers the delay justified.

(5) The arbitral tribunal shall decide on a plea referred 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. 1[