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TMI Blog2014 (12) TMI 1416X X X X Extracts X X X X X X X X Extracts X X X X ..... a dispute arising between the parties in respect of the work carried out by the Appellant, the Respondent Corporation terminated the said contract and encashed the bank-guarantee. Thereafter, the Appellant filed a Civil-Suit being C.S. No. 63 of 2003 before the Calcutta High Court challenging the termination of the Agreement as well as the encashment. 5. The Calcutta High Court disposed of the suit on 22-05-2003 by recording "Terms of Settlement" between the parties, whereby it was decreed that the dispute would be referred to arbitration in terms of the contract dated 04-04-2002 within a period of 30 days, under the provisions of the Arbitration Act, 1996. 6. The Tribunal made an award on 27-11-2006. By the said award, the Tribunal partly allowed the claims of the Appellant and accordingly awarded a sum of approximately Rs. 6.90 crores as well as the release of Fixed Deposit Receipts which had been deposited as security with the Respondent. 7. Aggrieved by the award dated 27-11-2006, the Respondent filed a petition on 09-01-2007 for setting aside the award Under Section 34 of the Arbitration Act, 1996. The Respondent assailed the award as being in contravention of Clause (b) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned award passed by the Arbitral Tribunal constituted-by the Indian Council of Arbitration, New Delhi having no jurisdiction to entertain and/or decide the dispute, the impugned award is a total nullity and non-est in the eye of law. 11. According to the Appellant, the Tribunal under the Arbitration Act, 1996 was fully empowered to enter into and decide the dispute submitted to it, since the dispute was referred in pursuance of an arbitration clause contained in the Concession Agreement, which reads as follows: 39.1 Any dispute, which is not resolved amicably as provided in Clause 39.1 and 39.2 shall be finally decided by reference to arbitration by a Board of Arbitrators appointed as per the provision of the Arbitration and Conciliation Act, 1996 and any subsequent amendment thereto. Such Arbitration shall be held in accordance with the Rules of Arbitration of the Indian Council of Arbitration and shall be subject to the provisions of the Arbitration and Conciliation Act, 1996 and as amended from time to time thereafter. 12. The Appellant further contends that the aforesaid clause covers any dispute which is not resolved amicably and is intended to cover the present dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diction 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. On a plain reading, this provision mandates that a plea that the Tribunal does not have jurisdiction shall not be raised later than the submission of the statement of defence. There is no doubt about either the meaning of the words used in the Section nor the intention. Simply put, there is a prohibition on the party from raising a plea that the Tribunal does not have jurisdiction after the party has submitted its statement of defence. The intention is very clear. So is the mischief that it seeks to prevent. This provision disables a party from petitioning an Tribunal to challenge its jurisdiction belatedly, having submitted to the jurisdiction of the Tribunal, filed the statement of defence, led evidence, made arguments and ultimately challenged the award Under Section 34 of the Arbitration Act, 1996. This is exactly what has been done by the Respondent Corporation. They did not raise the question of jurisdiction at any stage. They did not rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Tribunal to deal with the subject matter of arbitration itself and the consequence would be the nullity of the award, such objection may be raised even at the hearing of the petition Under Section 34 of the Act. In support, the learned senior Counsel relied on Clause (b) of Sub-section (2) of Section 34 which reads as follows: 34(2) An arbitral award may be set aside by the Court only if- (a)... (b) the Court finds that- (i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or (ii) the arbitral award is in conflict with the public policy of India. It is not possible to accept this submission; In the first place, there is nothing to warrant the inference that all objections to the jurisdiction of the Tribunal cannot be raised Under Section 16 and that the Tribunal does not have power to rule on its own jurisdiction. Secondly, Parliament has employed a different phraseology in Clause (b) of Section 34. That phraseology is "the subject matter of the dispute is not capable of settlement by arbitration." This phrase does not necessarily refer to an objection to 'jurisdiction' as the term is wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ward is in conflict with the public policy of India cannot be equated with the contention that Tribunal under the Central Act does not have jurisdiction and the Tribunal under the State Act, has jurisdiction to decide upon the dispute. Furthermore, it was stated that this contention might have been raised under the head that the Arbitral Award is in conflict with the public policy of India. In other words, it was submitted that it is the public policy of India that arbitrations should be held under the appropriate law. It was contended that unless the arbitration was held under the State Law i.e. the M.P. Act that it would be a violation of the public policy of India. This contention is misconceived since the intention of providing that the award should not be in conflict with the public policy of India is referable to the public policy of India as a whole i.e. the policy of the Union of India and not merely the policy of an individual state. Though, it cannot be said that the upholding of a state law would not be part of the public policy of India, much depends on the context. Where the question arises out of a conflict between an action under a State Law and an action under a Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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