Facts
The disputes between the parties relating to a partnership firm were referred to arbitration by a consent order of the Supreme Court. During the arbitral proceedings, Respondent Nos.1 to 3, who claimed to be non-signatories to the arbitration agreement, sought deletion of their names from the proceedings. The Arbitral Tribunal rejected their jurisdictional objection, treating it as one under S.16 Arbitration and Conciliation Act, 1996. The respondents challenged the order under Art.227 Const. of India, and the High Court entertained the petition and stayed notices issued by the Tribunal. The appellant challenged the High Court's orders.
Issues Framed
Whether the High Court was justified in entertaining a petition under Art.227 Const. of India against an order of the Arbitral Tribunal rejecting a jurisdictional objection under S.16 Arbitration and Conciliation Act, 1996.
Court’s Reasoning
(a) The Court held that the Arbitration and Conciliation Act is a self-contained code. S.5 Arbitration and Conciliation Act, 1996 mandates minimal judicial intervention, while S.16 embodies the doctrine of kompetenz-kompetenz, empowering the Tribunal to rule on its own jurisdiction. Ordinarily, objections to such orders can be raised only in proceedings under S.34 after the final award.
(b) Relying on SBP & Co. v. Patel Engineering Ltd., Deep Industries Ltd. v. ONGC, Punjab State Power Corpn. Ltd. v. Emta Coal Ltd., and M/s Tarini Prasad Mohanty v. M/s Sunflag Iron and Steel Co. Ltd., the Court reiterated that supervisory jurisdiction under Art.227 may be exercised only in exceptional cases involving a patent lack of inherent jurisdiction, which must be apparent on the face of the record.
(c) The High Court failed to record any prima facie finding that the Tribunal's order suffered from such patent lack of jurisdiction. The issue whether non-signatories were "veritable parties" required factual and legal determination and, in view of Cox and Kings Ltd. v. SAP India Pvt. Ltd., squarely fell within the Tribunal's competence under S.16.
(d) The Court further observed that Respondent Nos.1 to 3 had been parties to the earlier Supreme Court proceedings referring the disputes to arbitration but had neither opposed the reference nor sought review or modification of that order. Their subsequent challenge resulted in avoidable delay, contrary to the object of the Arbitration Act.
Held
The appeals were allowed. The High Court's orders were set aside, and the revision petition under Art.227 Const. of India was dismissed. The Arbitral Tribunal was directed to independently decide the jurisdictional objection regarding the respondents' non-signatory status and conclude the arbitration expeditiously.
Ratio
An order rejecting a jurisdictional objection under S.16 Arbitration and Conciliation Act, 1996 is ordinarily challengeable only under S.34 after the final award; the High Court should entertain a petition under Art.227 Const. of India only where the Tribunal's order discloses a patent lack of inherent jurisdiction apparent on its face. (Paras 30–34).
Relevant Para
Para 30
“Therefore, this is a settled position of law that the High Court must exercise extreme circumspection while invoking its supervisory jurisdiction under Article 227 of the Constitution of India in matters challenging an Arbitral Tribunal’s rejection of an application under Section 16 of the Act. In the absence of such a manifest jurisdictional defect, judicial interference at the interlocutory stage would be unwarranted and contrary to the legislative policy of minimal court intervention in arbitral proceedings. Orders passed by the Tribunal on an application under Section 16 of the Act are ordinarily amenable to challenge only under Section 34 of the Act upon the conclusion of the arbitral proceedings and the passing of the final award. It is always safe for the High Courts that, before entertaining revision petitions under Article 227 of the Constitution of India against the Orders passed by the Arbitral Tribunal, while exercising powers under Section 16 of the Act, it should record a prima facie finding regarding the patent lack of inherent jurisdiction and that too after providing an opportunity of hearing to the rival party/parties.”
Case Details
Citation: 2026 INSC 701
Decided on: 14 July 2026
Case Title: Manash Kamal Bezboruah v. M/s Bokahola Tea Company Private Limited & Ors.
Court: Supreme Court of India
Bench: K.V. Viswanathan, J.; Vijay Bishnoi, J.