In case where the arbitral tribunal rules that it has no jurisdiction, an appeal against that order would lie under Section 37 of the Arbitration and Conciliation Act 1996.

The Hon’ble High Court of Delhi held that in a case where the Arbitral Tribunal proceeds to pass an award after overruling the objection relating to jurisdiction, the remedy lies in Section 34 of the Arbitration and Conciliation Act 1996. However where tribunal declines to pass an award for reasons of not having jurisdiction the remedy shall lie under Section 37 of the Act.

This pronouncement was made by the Hon’ble High Court of Delhi in the matter M/s Indeen Bio Power Limited Vs. M/s EFS Facilities Service (India) Pvt. Ltd. [ARB. A. (COMM.) 39/2016] on 26.04.2018.

Challenge

The only point for consideration before the Hon’ble Court was that in a case when the Arbitral Tribunal ruled that it has no jurisdiction, would an appeal under Section 37 of the Arbitration and Conciliation Act 1996, lie against the said order or would it be liable to be challenged under Section 34 of the Act as an award.

Held

The Hon’ble High Court of Delhi after relying upon National Thermal power Corpn. Ltd Vs Siemens Atiengesellschaft; (2007) 4 SCC 451, rejected the objections raised by the Respondent. It was held that in case the Arbitral Tribunal, by its order, has ruled that it has no jurisdiction, an appeal would lie under Section 37 of the Act, against said order.

It was further held that in the context of Section 16 and the specific wording of Section 37(2)(a) of the Act, it would be appropriate to hold that what is made directly appealable by Section 37(2)(a) of the Act is only an acceptance of a plea of absence of jurisdiction, or of excessive exercise of jurisdiction and the refusal to proceed further either wholly or partly.