Arbitration Lawyer: A civil suit cannot be filed to challenge the jurisdiction of an arbitrator; SC.

Supreme Court of India

Justice R. Subhash Reddy and Justice Abhay Manohar Sapre

The SC { National Aluminium Company Limited v. Subhash Infra Engineers Pvt. Ltd. & Anr. } holds that any objection with respect to existence or validity of the arbitration agreement, can be raised only by way of an application under Section 16 of the Act and Civil Court cannot have jurisdiction to go into such question.

In the present case, the civil suit was filed by the respondent no. 1 for challenging the jurisdiction of the arbitrator. It was held by the SC that if the first respondent wants to raise an objection with regard to existence or validity of the arbitration agreement, it is open for the first respondent to move an application before the arbitrator, but with such plea, he cannot maintain a suit for declaration and injunction. It was held, though, the Trial Court rightly rejected the interim injunction sought for by the first respondent, the same is erroneously reversed by the learned Additional District Judge and such order is confirmed by the High Court, by the impugned order. Accordingly, the impugned order was set aside by the SC. However, the liberty was given by the SC to the respondent no. 1 to challenge the jurisdiction of an arbitrator, by moving an application under Sec 16 of the Act, in arbitration proceedings.