JURISDICTION OF ARBITRAL TRIBUNALS
and
INTERIM MEASURES ORDERED BY ARBITRAL TRIBUNAL
Lecture by- Dr. Saltanat Sherwani
JURISDICTION
Section 16. Competence of arbitral tribunal to rule on its
jurisdiction.—
(1) The arbitral tribunal may rule on its own jurisdiction,
including riding 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.
Section 16 is analogous to Section 13 of the Arbitration Act,
1940.
Section 16(1) – This sub-section empowers the arbitral tribunal
to make rules on its own jurisdiction, including any objections in
respect to the existence or validity of the arbitration agreement,
however over such matters ultimate control is exercised by the
courts as provided under Section 34 of the Act, 1996.
Sub-section (1) contains principle of ‘autonomy’ and
distinguishes arbitration clause from other clauses in the
agreement. Thus, an arbitration
clause is independent of the other terms of contract and the
arbitral tribunal cannot invalidate an arbitration clause while
invalidating the other clauses
of an agreement.
Section 16(1) contains expression "The Arbitral Tribunal may
rule". That means it is the discretionary power of an arbitral
tribunal which it may
exercise on its own motion or at the request of a party. An
arbitrator cannot be compelled to exercise those powers,—,
Section 16(2) provides plea to raise objections to jurisdiction.
The parties have vested rights to raise objections to jurisdiction
but ‘not later than the submission of the statement of defence’.
A party shall not be deprived of such right to raise objections to
jurisdiction merely on the ground that he has appointed or
participated in the appointment of an arbitrator. Thus, an
aggrieved party has an opportunity to raise a jurisdictional plea
before an arbitral tribunal even after appointment of an
arbitrator.
Section 16(3) states that as soon as an arbitral tribunal goes
beyond the scope of his authority objections are to be raised
while the arbitral
proceedings are in progress
and in this context Section 16(4) waives off the time limit
provided such delay is justified and reasonable.
Sub-section (5) states "The arbitral tribunal shall decide on a
plea referred to in Sections 16(2) and (3), and where the
arbitral tribunal takes
a decision rejecting the plea, it shall continue with the arbitral
proceedings and make an arbitral award". That means if a plea
of objection to
jurisdiction made by a party before an arbitral tribunal and an
arbitral tribunal proceeds by rejecting such plea and also
makes an arbitral award,
in such cases, an aggrieved party may approach to the court
for setting aside such an arbitral award according to Section 34
of the Act as this provision
is available to an aggrieved party under sub-section (6) of
Section 16 of the Act.
INTERIM MEASURES ORDERED BY ARBITRAL TRIBUNAL
Section 17
17.Interim measures ordered by arbitral tribunal.—(1) A party
may, during the arbitral proceedings apply to the arbitral
tribunal—
(i) for the appointment of a guardian for a minor or
person of unsound mind for the purposes of arbitral
proceedings; or
(ii) for an interim measure of protection in respect of any
of the following matters, namely:—
(a) the preservation, interim custody or sale of any
goods which are the subject-matter of the arbitration
agreement;
(b) securing the amount in dispute in the arbitration;
(c) the detention, preservation or inspection of any
property or thing which is the subjectmatter of the
dispute in arbitration, or as to which any question
may arise therein and authorising for any of the
aforesaid purposes any person to enter upon any
land or building in the possession of any party, or
authorising any samples to be taken, or any
observation to be made, or experiment to be tried,
which may be necessary or expedient for the
purpose of obtaining full information or evidence;
(d) interim injunction or the appointment of a
receiver;
(e) such other interim measure of protection as may
appear to the arbitral tribunal to be just and
convenient, and the arbitral tribunal shall have the
same power for making orders, as the court has for
the purpose of, and in relation to, any proceedings
before it.
(2) Subject to any orders passed in an appeal under section 37,
any order issued by the arbitral tribunal under this section shall
be deemed to be an order of the Court for all purposes and shall
be enforceable under the Code of Civil Procedure,1908 (5 of
1908), in the same manner as if it were an order of the Court.]
Section 17 of the Act gives the arbitral tribunal the power to pass
an order for interim measures if a party applies to the tribunal
for such interim relief. A party may apply for interim relief under
Section 17 of the Act only after the arbitral tribunal has been
constituted till the arbitral award is passed.
Any party to the arbitration agreement may file an application to
the arbitral tribunal under Section 17 during the course of the
arbitration, i.e. after the arbitral tribunal has been constituted
and up to the time the arbitral award has been made.
Section 17 provides power to arbitrators to take such interim
measures which are necessary and also reasonable at the
request of a party. An arbitral tribunal cannot order interim
measures as such on its own motion.
INTERIM RELIEF SOUGHT UNDER SECTION 17
Application for interim relief may include the following:
1. Appointment of guardian for a minor or person of
unsound mind;
2. Preservation, interim custody or sale of goods (if the
goods are of perishable nature) for any goods related to
the arbitration agreement;
3. Securing the amount of claims;
4. Allowing the detention, preservation or inspection of
any property or thing, authorizing any person to enter
upon any land or building, authorizing any samples to
be taken or observations to be made or experiments to
be tried in order to expedite the process and obtain
accurate & complete information or evidence;
5. Allowing interim injunction or appointment of receiver;
6. Any other reliefs which the court considers proper
taking into account the facts and circumstances of the
case.
The interim relief that can be sought under Section 17 of the
Act is the same as that can be sought under Section 9.
DIFFERENCE BETWEEN SECTION 9 AND 17
Power under section 17 can be exercised only after arbitral
tribunal is constituted and it starts functioning.
Power of Court under section 9 are wide as the words- before,
during or after, indicate so. A party can approach the Court to
seek interim measures of protection even before arbitration
commences.
The Supreme Court in MD Army Welfare Housing
Organisation v. Sumangal Services Pvt. Ltd. observed that
the powers of the tribunal under section 17 cannot go beyond
the arbitration agreement. An interim measure under section
17 must address the subject matter of the dispute and be
addressed only to the parties of the arbitration. Furthermore,
while discussing the ambit of the court’s power to issue interim
reliefs against the third party under section 9, the Delhi High
Court in Blue Coast reiterated the view propounded in Gatx
India v. Arshiya Rail Infrastructure, wherein it was
observed that section 17 specifically allows the direction to be
issued only against the parties to the agreement.
