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TMI Blog2003 (5) TMI 419X X X X Extracts X X X X X X X X Extracts X X X X ..... the Board invited bids in the year 1990 and the respondent M/s. Subhas Project and Marketing Ltd. were awarded the contract and a contract agreement was entered into on 20-3-1991. According to the Board a sum of Rs. 67,36,175 was paid to the said company but nothing happened. Thereafter, Arbitration No. 5/2001 and 4/2002 was moved by the Govt. before the Hon ble the Chief Justice, Gauhati High Court and vide the order dated 26-3-2002 Sri M.N. Bhagwati, respondent No. 2 was appointed as the sole Arbitrator. The case of the Board is that the Arbitrator was appointed without any notice to them. Petitioner Board thereafter challenged the appointment of the Arbitrator on the ground that the agreement does not contain any arbitration clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintainability of the writ petition in the present case stating, inter alia, that in view of the specific provision contained in the Act itself, the Arbitrator has been given power to decide about the jurisdiction and in case the Arbitrator decides that he got no jurisdiction, that is the end of the matter and the aggrieved party may approach the competent forum. However, if the Arbitrator rejects the plea and hold that he has got jurisdiction, he may continue with the arbitral proceeding and make an arbitral award and the aggrieved party shall have the option to challenge the same under section 34 of the Act only. Section 16 of the Act reads as follows: "16. Competence of Arbitral Tribunal to rule on its jurisdiction (1) The Arbitr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordance with section 34." 5. There is no dispute at the Bar that this is a private arbitration in the sense that the Arbitrator has been appointed on the basis of the agreement/contract in between the parties and the respondent No. 2 is not the instituted authority and this is not a case of statutory arbitration. Learned counsel for the petitioner has relied on the observation of the Apex Court in the case of Kerala Education Bill, 1957, In re AIR 1958 SC 956, wherein it was held that the power under Article 226 of the Constitution cannot be curtailed by any legislation, short of amendment of the Constitution. Learned counsel has also referred to the observation of the Apex Court in paras 73 and 79 of L. Chandra Kumar v. Union of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed to interfere at each and every stage of arbitration proceeding to examine the correctness of the finding or decision, it will be a never ending business and it can safely be apprehended that the arbitration will be more time consuming process than the Court process, as there will be two forums instead of one. The constitutional vires of section 16(5) was challenged before the High Court and the matter was taken before the Apex Court in case of Babar Ali v. Union of India [2000] 2 SCC 178, whereby the SLP was dismissed by stating as below : "We find that there is no question of the Arbitration and Conciliation Act, 1996 being unconstitutional or in any way offending the basic structure of the Constitution of India, as the Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... makes it explicitly clear that the Arbitral Tribunal has the power to rule on its own jurisdiction even when any objection with respect to existence or validity of the arbitration agreement is raised and a conjoint reading of sub-sections (2), (4) and (6) of section 16 would make it clear that such a decision would be amenable to be assailed; within the ambit of section 34 of the Act. In this view of the matter, we see no infirmity with the impugned order so as to be interfered with by this Court. The petitioner who is a party to the arbitral proceedings may raise the question of jurisdiction of the Arbitrator as well as the objection on the ground of non-existence of pony arbitration agreement in the so-called dispute in question and such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not maintainable even though one of the parties to be dispute may be an instrumentality of the State otherwise amenable to the writ jurisdiction of this Court. Even if the appointment of the arbitrator was invalid, as contended by the petitioner the same will have to be decided by the court before which the validity of the award would be challenged." The matter raised in this writ petition was earlier contended before the Bombay High Court in the case of Basf Styrenics (P.) Ltd. v. Offshore Industrial Construction (P.) Ltd. 2002 (2) RAJ 554 (Bom.). The Division Bench of the Bombay High Court held: "In our considered opinion, therefore, the scheme of the Act is clear, and it is that if the Arbitral Tribunal holds that it has jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X
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